3 Stocks Near 52-Week Highs Worth Selling

Following the resolution of the fiscal cliff debacle, the broad-based S&P 500 clipped a five-year high last week in spite of yet another debate -- over the U.S. debt ceiling -- looming right around the corner. For skeptics like me, that's an opportunity to see whether companies have earned their current valuations.

Keep in mind that some companies deserve their current valuations. Celgene (NASDAQ: CELG  ) , for example, stole the show at the JPMorgan Healthcare Conference when it forecast a doubling in revenue to $12 billion and a potential tripling in EPS to $14 by 2017 -- all from organic growth.

Still, other companies might deserve a kick in the pants. Here's a look at three companies that could be worth selling.

It loves me -- it loves me not
Having previously worked in the jewelry industry, let me tell you that jewelry shoppers are one of the most fickle groups of individuals you will ever find. Certain gifts are necessary, including wedding rings, but many jewelry purchases, especially those for oneself, are at a serious risk of falling by the wayside thanks to the increase in the payroll tax from the American Taxpayer Relief Act. This means that despite stellar preliminary holiday season guidance from Signet Jewelers (NYSE: SIG  ) , including a 4.7% rise in U.S. same-store sales, the good times might be short-lived.

Signet, which owns both the low-to-mid-tier-price-point Kay Jewelers and the mid-to-higher-tier Jared, could be forced to retool its inventory if the projected $1,000 in annual consumption is lost per person. There is a chance that very high-margin low-end products -- think $75 and under -- could fly off the shelves due to the drop in discretionary cash, but it's much more likely that in addition to weakness in Europe, which demonstrated a 2.6% drop in same-store sales according to Signet's preliminary holiday results, its U.S. segment will begin to taper off shortly after Valentine's Day. With a sub-1% yield, I'd say all optimism has been baked into the share price at this level.

Jet it and forget it!
If this was 2007, I'd have proclaimed you a genius for owning Pool Corp. (NASDAQ: POOL  ) which, unsurprisingly, is a pool wholesaler. The conditions pre-2007 were perfect for luxury consumption and the housing market was on fire.

Fast-forwarding to today, Pool Corp. is one of the furthest stocks on my radar in terms of companies deserving of a 52-week high. Yes, we have seen a decent rebound in the housing market, which bodes well for future pool sales, and yes, the weather in the U.S. was completely out of whack in 2012, which led to significantly warmer-than-normal temperatures throughout much of the Midwest. But I'd hardly call this a thesis for investment with the company now valued at a bubbly 21 times forward earnings and only expected to grow sales by roughly 7% in fiscal 2013.

Consider the fact that Pool Corp.'s same-store sales comparisons are going to be extremely difficult with a record year of heat in 2012. The chance of a warmer year in 2013 isn't out of the question, but very unlikely. Also, just as with Signet, keep in mind what $1,000 less on average per taxpayer per year, is going to do to personal consumption like pools. Here's a hint... it's not going to be a good thing! Finally, remember that pool sales are cyclical, so the first and fourth quarters are not the time to expect big profits from these companies. I've seen all I need to see and am ready to enter an underperform call.

This chicken isn't kickin'
Let's have a quick jaunt through the fast-food sector, shall we?... I promise this won't take but a moment! McDonald's (NYSE: MCD  ) was one of the worst performers last year as negative currency translation and copycat competitors weighed on its business. Yum! Brands (NYSE: YUM  ) , owner of Taco Bell and KFC, recently lowered its fourth-quarter outlook due to potential chicken quality issues in China. Burger King Worldwide (NYSE: BKW  ) ... well, they're just a mess domestically and overseas, having lost the No. 2 hamburger sales spot to Wendy's in 2012. AFC Enterprises (NASDAQ: PLKI  ) , owner of Popeye's Chicken, reached a new 52-week high! Confused yet?

I'm not saying AFC doesn't deserve some premium to its peers, because it has clearly outperformed within the fast-food sector in recent quarters. AFC has delivered 10 straight quarters of same-store sales growth, including 6.8% in the U.S. in its most recent quarter, but it could face a world of hurt if chicken prices rise in 2013 while consumer incomes simultaneously decrease. I simply haven't seen enough brand-building from its Popeye's brand to thoroughly differentiate AFC from the pack, and I feel that at 20 times forward earnings, everything would have to go perfectly this year just for it to maintain its current share price. Call me chicken if you like, but I'm passing.

Foolish roundup
This week's theme completely revolved about personal consumption. If a 2% payroll tax hike is set to reduce the average worker's discretionary income by close to $1,000, you can expect consumers to be buying fewer pieces of jewelry and far fewer pools, and going out to eat even less.

I'm so confident in my three calls that I plan to make a CAPScall of underperform on each one. The question is: Would you do the same?

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