Among the fond memories from my brokerage days is the reply a particularly Belushi-esque colleague offered to the oft-asked client question, “Which way’s the market going?”

“It’s goin’ higher.”

Historical data suggest that new market highs, as measured by broad-based equity indexes such as Standard & Poor’s 500-stock index, are good things, occurring regularly during bull markets.

This being the case, we’re happy to report that five of the 14 current Aggressive Holdings posted new 52-week highs on the Australian Securities Exchange (ASX) during the 10 days ended Feb. 12, 2015. 

We’re downright ecstatic at the fact that 11 of 14 Conservative Holdings have also set new near-term highs.

And the S&P/ASX 200 Index is pushing out to post–financial crisis highs, helped by the Reserve Bank of Australia’s recent rate cut as well as strong rallies for crude oil and iron ore prices.

As I sit in my office in Alexandria, Virginia, anticipating walking out at 4:30 a.m. into a –1 degree wind chill for my Friday-morning swim at the local rec center, I certainly relish a Southern Hemisphere summer perspective.

We can’t hop on a flight tomorrow. But we can evaluate our Holdings’ recent performance in nominal terms. And we’re enjoying a warm, fuzzy feeling.

The 28 current AE Portfolio components posted an average total return in local terms of 15.4% from Feb. 13, 2014, through Feb. 12, 2015. Aggressive Holdings were up 0.6%, Conservative Holdings 30.3%.

The S&P/ASX 200 posted a total return of 13% in local currency terms for the same period. The S&P 500 was up 16.5% in U.S.-dollar terms.

Of course, most of us are based here in the U.S., and we can’t wish currency effects away. 

In real life, then, we’re looking at trailing 12-month average total returns of –0.6% for the AE Portfolio, –13.4% for our Aggressive Holdings and 12.2% for our Conservative Holdings.

In U.S. dollar terms, the S&P/ASX 200 has posted a –2.7% total return, while the S&P 500 is up 16.5%.

But I, for one, take good comfort in the local market’s treatment of the Australian stocks we’ve selected.

Top XI

That capital is flowing into our picks—the Conservative Holdings in particular—underscores the fact that we’re focusing on high-quality businesses.

Identifying high-quality businesses that generate solid and growing income streams is AE’s raison d’être.

That’s why we’ve stocked the Conservative Holdings with Australian real estate investment trusts (A-REITs) such as GPT Group (ASX: GPT, OTC: GPTGF) and Stockland (ASX: SGP, OTC: STKAF).

Telecoms such as M2 Telecommunications Group Ltd. (ASX: MTU, OTC: MTCZF) and Telstra Corp Ltd. (ASX: TLS, OTC: TTRAF, ADR: TLSYY) are also attracting investors seeking safe income.

Health care is another attractive sector, and we’re participating via CSL Ltd. (ASX: CSL, OTC: CMXHF, ADR: CMXHY), Ramsay Health Care Ltd. (ASX: RHC, OTC: RMSYF) and Sonic Healthcare Ltd. (ASX: SHL, OTC: SKHCF, ADR: SKHCY).

Utilities APA Group (ASX: APA, OTC: APAJF) and DUET Group (ASX: DUE, OTC: DUETF) support strong payouts with fee-generating assets.

ANZ Banking Group Ltd. (ASX: ANZ, OTC: ANEWF, ADR: ANZBY) gives us financial exposure not only to Australia but to the broader and fast-growing Greater Asia region.

And Transurban Group (ASX: TCL, OTC: TRAUF) is among the best-performing industrials, as it continues to add key transportation infrastructure assets that generate cash flow for shareholders.

Common threads among this group of stocks—in addition to the fact that they’re making new highs—include the essential or quasi-essential nature of their businesses as well as their respective management teams’ ability to execute on strategic initiatives.

Unforgotten Five

Note that Aggressive Holdings Amalgamated Holdings Ltd. (ASX: AHD), GrainCorp Ltd. (ASX: GNC, OTC: GRCLF), Spark Infrastructure Group (ASX: SKI, OTC: SFDPF), Sydney Airport (ASX: SYD, OTC: SYDDF) and recent addition Toll Holdings Ltd. (ASX: TOL, OTC: THKUF, ADR: THKUY) have also set new 52-week highs in recent days.

Amalgamated is the dominant movie-theater operator in Australia. Spark Infrastructure owns utility assets, while Sydney Airport operates what is essentially the world’s gateway to Australia. 

So these three stocks, in addition to paying solid yields, generate stable and relatively predictable cash flows.

GrainCorp is coming up off a low base. We detail its recent past and its solid future prospects in one of this month’s Sector Spotlight features.

Aggressive Update

Rio Tinto Ltd. (ASX: RIO, NYSE: RIO) exceeded analyst expectations for 2014, announced a USD2 billion share buyback and raised its dividend by 12%, as it positions itself to satisfy investor hunger for yield.

Spending cuts and productivity gains should continue to insulate the mining giant against the impact of lower commodity prices.

Full-year net earnings grew by 78.1% to USD6.53 billion, the comparable aided by the fact that 2013 results were hurt by multibillion-dollar writedowns against assets.

Underlying earnings declined by 9% to USD9.3 billion but beat a consensus estimate of USD8.91 billion. The year-over-year decline resulted from a steep slide in the price of iron ore, Rio Tinto’s top commodity.

Rio cut USD5.6 billion off net debt during the year, taking its gearing ratio down to 19%. In addition to boosting shareholder returns, Rio’s balance sheet is getting stronger.

Rio Tinto is a buy under USD54 on the ASX using the symbol RIO.

Rio’s New York Stock Exchange-listed American depositary receipt—which also trades under the symbol RIO—is a buy under USD52.

Electronics retailer JB Hi-Fi Ltd. (ASX: JBH) also announced a solid dividend increase, though fiscal 2015 first-half net profit after tax (NPAT) declined by 1.9% to AUD88.5 million.

Total sales were up 1.3%, and comparable sales were down 0.7%, an improvement on recent results. Total sales during January were up 8.9% year-over-year, while like-for-like sales grew by 7%.

Management guided JB Hi-Fi to full-year total sales of AUD3.6 billion and NPAT of AUD127 million to AUD131 million.

The company will pay an interim dividend of AUD0.59, up 7.3% from a year ago. JB Hi-Fi is a buy under USD18.

Conservative Update

CSL Ltd. (ASX: CSL, OTC: CMXHF, ADR: CMXHY) sold off hard following its fiscal 2015 first-half earnings announcement, as management guided the company to slower growth over the balance of the year due to intense competition.

NPAT for the six months ended Dec. 31, 2014, rose 7.2% to USD692.2 million, as CSL continued its global expansion and boosted sales of its immunity-boosting medicines.

Management expects second-half NPAT to rise by about 10% in constant-currency terms, down from management’s 12% forecast issued in August 2014.

Management expects global demand for plasma therapies to continue to grow, though it also sees an increasingly competitive market, with new entrants and new products.

CSL will pay a first-half dividend of USD0.58, up from USD0.53 a year ago.

CSL is now a buy under USD69 on the ASX using the symbol CSL and on the U.S. OTC market using the symbol CMXHF.

CSL’s ADR, which represents 0.5 of an ordinary, ASX-listed share, is a buy under USD34.50.

Telstra Corp Ltd. (ASX: TLS, OTC: TTRAF, ADR: TLSYY) reported a 22.4% increase in first-half NPAT to AUD2.09 billion, exceeding analyst estimates. Management also announced a 3.4% increase to the interim dividend.

Mobile sales grew 10% to AUD5.33 billion, as Telstra added 366,000 new Australian customers, its biggest bump in mobile customers in three years. The company now has 16.4 million Australian mobile customers, more than two-thirds of the country’s 23.6 million population.

Management expects revenue for the full year to be “broadly flat,” while earnings are on track for “low single-digit” growth.

Telstra is a buy under USD5.50 on the ASX using the symbol TLS and on the U.S. OTC market using the symbol TTRAF.

Telstra’s ADR, which is worth five ASX-listed shares, is a buy under USD27.50.

Transurban Group (ASX: TCL, OTC: TRAUF), which reported preliminary financial and operating results in early January, confirmed that first-half proportional toll revenue was up 36.7% year-over-year to AUD760.6 million.

Management also boosted its full-year distribution guidance to AUD0.395 per share from a prior forecast of AUD0.39 per share.

Transurban’s solid free-cash flow generation will support additional acquisition and development opportunities and, therefore, further dividend growth. Transurban is a buy under USD7.50.