Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

5 Stocks Trading Near 52-Week High That Can Scale Higher

By Zacks Investment ResearchStock MarketsSep 20, 2021 09:30PM ET
www.investing.com/analysis/5-stocks-trading-near-52week-high-that-can-scale-higher-200602590
5 Stocks Trading Near 52-Week High That Can Scale Higher
By Zacks Investment Research   |  Sep 20, 2021 09:30PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 

Investors generally consider a 52-week high as a good criterion to determine an entry or exit point for a given stock. However, stocks touching new 52-week highs are often predisposed to profit-taking, resulting in pullbacks and trend reversals.

Moreover, given the high price, investors often wonder if the stock is overpriced. While the speculations are not absolutely baseless, all stocks hitting a 52-week high are not necessarily overpriced.

In fact, investors might lose out on top gainers in an attempt to avoid the steep prices.

A good stock can maintain its momentum and keep scaling new highs. So, more information on a stock is necessary to understand whether or not there is scope for further upside.

Here we discuss a strategy to find the right stocks. The technique borrows from the basics of momentum investing and bets on “buy high, sell higher.”

52-Week High: A Good Indicator

Many a time, stocks hitting a 52-week high fail to scale higher despite having potential. This is because investors fear that the stocks are overvalued and expect the price to crash.

Overvaluation is natural for most of these stocks as investors’ focus (or willingness to pay the premium) has helped them reach the level. But that does not always indicate an impending decline. Factors such as robust sales, surging profit levels, earnings growth prospects, and strategic acquisitions that encouraged investors to bet on these stocks could keep them motivated if there is no tangible negative. In other words, the momentum might continue.

Also, when a string of positive developments dominates the market, investors find their under-reaction unwarranted, even if there are no company-specific driving forces.

Setting the Right Filters

We ran a screen to zero in on 52-week high stocks (trading near the high level) that hold tremendous upside potential. The screen includes parameters to shortlist stocks with strong earnings growth expectations, sturdy value metrics, and price momentum.

Moreover, the screen filters stocks that are relatively undervalued compared to their peers, in terms of earnings as well as sales, ensuring the continuation of their rally for some time.

Current Price/52 Week High >= .80

This is the ratio between the current price and the highest price at which the stock has traded in the past 52 weeks. A value greater than 0.8 implies that the stock is trading within 20% of its 52-week high range.

% Change Price – 4 Weeks > 0

It ensures that the stock price has moved north over the past four weeks.

% Change Price – 12 Weeks > 0

This metric guarantees a continued upward price momentum for the stock over the past three months as well.

Price/Sales

The lower, the better.

P/E using F(1) Estimate

This metric measures the amount an investor puts into a company to obtain one dollar of earnings. It narrows down the list of stocks to those that are undervalued compared to the industry.

One-Year EPS Growth F(1)/F(0) >= XIndMed

This helps choose stocks that have higher growth rates than the industry. This is a meaningful indicator, as decent earnings growth adds to investor optimism.

Zacks Rank =1

No screening is complete without the Zacks Rank, which has proved its worth since inception. It is a fundamental truth that stocks with a Zacks Rank #1 (Strong Buy) have always managed to brave adversities and beat the market average. You can see the complete list of today’s Zacks #1 Rank stocks here.

Current Price >= 5

This parameter will help screen stocks that are trading at $5 or higher.

Volume – 20 days (shares) >= 100000

The inclusion of this metric ensures that there is a substantial volume of shares, so trading is easier.

Here are five of the 40 stocks that made it through the screen:

Saskatoon, Canada-based Nutrien (NYSE:NTR) Ltd. NTR is expected to gain from higher demand for crop nutrients in 2021. Strong grower economics and higher crop prices are driving fertilizer demand globally. Demand for phosphate and potash is expected to remain strong this year. Demand for nitrogen fertilizer also remains healthy in North America, Brazil, and India. Higher selling prices of crop nutrients are also expected to drive its sales and margins. Acquisitions have also strengthened the company’s foothold in the growing Brazilian agricultural market. The company, which is currently Zacks #1 Ranked, pulled off a trailing four-quarter earnings surprise of 127.58%, on average.

Headquartered in Las Vegas, Boyd Gaming (NYSE:BYD) Corporation BYD has been benefiting from initiatives to strengthen current operations and growth through capital investment as well as other strategic measures. Moreover, expansion of online betting offerings along with FanDuel partnership bodes well. Going forward, the company is optimistic about online gaming prospects in Louisiana. Also, signs of improvement are being noticed in its destination business. Although the number of destination travelers remains below the pre-pandemic levels, a higher rate of hotel reservations coupled with pent-up demand for non-gaming amenities indicates revival. The company has a trailing four-quarter earnings surprise of 85.42%, on average, and a Zacks Rank #1 at present.

Headquartered in Hamilton, Bermuda, Signet Jewelers (NYSE:SIG) Limited SIG is a retailer of diamond jewelery, watches, and other products. The company operates in the United States, Canada, the U.K., Puerto Rico, the Republic of Ireland, and the Channel Islands. The company is often considered as the leading retailer of diamond jewelery. This Zacks #1 Ranked player has a trailing four-quarter earnings surprise of 77.45%, on average.

Incorporated in Delaware, AutoNation (NYSE:AN), Inc. AN is the largest automotive retailer in the United States. A diversified product mix and multiple streams of income reduce its risk profile and bode well for top and bottom-line growth. Strong footprint, large dealer network and, store expansion efforts are set to drive profitability. Increased focus on cost discipline is anticipated to aid margins. With the launch of its digital platform, AutoNation Express, the company has stepped up its digitization game, which will help the firm to boost profitability. The impending buyout of 11 stores and a collision center from Peacock Automotive Group is set to buoy AutoNation’s portfolio and add $380 million in its annual revenues. The company has a trailing four-quarter earnings surprise of 48%, on average, and a Zacks Rank #1 at present.

Headquartered in Wilmington, MA, Onto Innovation (NYSE:ONTO) ONTO operates as the leading manufacturer of avant-garde process control tools that perform macro defect inspections and metrology, and lithography systems. The company is well-positioned to benefit from strong customer demand for its solutions across the semiconductor value chain while improving its operational efficiency. It estimates new customers for planar films, an inspection of image sensors, and the increasingly critical ramp of panel-level packaging to add more than $350 million to its served markets in 2022. The company, which is currently Zacks #1 Ranked, pulled off a trailing four-quarter earnings surprise of 15.5%, on average.

You can get the rest of the stocks on this list by signing up now for your 2-week free trial to the Research Wizard and start using this screen in your own trading. Further, you can also create your own strategies and test them first before taking the investment plunge.

The Research Wizard is a great place to begin. It's easy to use. Everything is in plain language. And it's very intuitive. Start your trial to the Research Wizard today. And the next time you read an economic report, open up the Research Wizard, plug your finds in, and see what gems come out.

Click here to sign up for a free trial to the Research Wizard today.

Disclosure: Officers, directors and/or employees of Zacks Investment Research may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material. An affiliated investment advisory firm may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material.

Disclosure: Performance information for Zacks’ portfolios and strategies are available at: https://www.zacks.com/performance


5 Stocks Set to Double

Each was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2021. Previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.

Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.

Today, See These 5 Potential Home Runs >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

AutoNation, Inc. (AN): Free Stock Analysis Report

Signet Jewelers Limited (SIG): Free Stock Analysis Report

Boyd Gaming Corporation (BYD): Free Stock Analysis Report

Nutrien Ltd. (NTR): Free Stock Analysis Report

Onto Innovation Inc. (ONTO): Free Stock Analysis Report

To read this article on Zacks.com click here.
5 Stocks Trading Near 52-Week High That Can Scale Higher
 

Related Articles

5 Stocks Trading Near 52-Week High That Can Scale Higher

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (1)
Bright Heflide
Bright Heflide Sep 21, 2021 11:12AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
hi comment us do can also trade
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email