The S&P 500 and the Nasdaq swung between small gains and losses through morning trading Tuesday as retail giants and consumer spending grab the Wall Street spotlight. Many investors are also growing increasingly uneasy about the debt-ceiling negotiations.

Retail sales climbed by a seasonally adjusted 0.4% in April up from a -0.7% decline in March. The rebound ended a two-month skid and showcased that the low unemployment rate is helping the consumer-driven economy march forward despite recession fears.

It is possible that Home Depot’s fresh, downbeat sales guidance on Tuesday is a sign of what’s to come from the likes of Target and others. It is also very plausible that Home Depot won’t be a harbinger, but simply faces a very difficult-to-compete against stretch of growth and slowing home improvement and renovation spending after a covid boom.

Despite the unknowns of what’s to come on the retail spending front and the debt-ceiling headlines, the tech-heavy Nasdaq is grinding higher and the benchmark remains solidly above its 50-day and 200-day moving averages. But not all stocks are taking part in the upbeat start to 2023, with strong performances from some huge tech names papering over a decent chunk of bearishness.   

This backdrop means investors likely want to search for stocks that are working in 2023 and over the last year. Today we utilize a screen that helps investors find stocks that have boosted their earnings outlooks and are trading near their highs as we enter the back half of May.

Don't Be Afraid of New Highs

Some investors might prefer not to buy stocks at new highs. But if somebody asked you what the best stocks in your portfolio are, it’s likely you would name the stocks moving up the most.

The most basic idea is that the winners in your portfolio are the ones going up. If a stock is underperforming the market or going down, you'll quickly identify it as one of your worst holdings. Therefore, it makes sense that some of these stocks will be reaching new highs along the way.

Many investors are hesitant to buy stocks making new 52-week highs. But there really isn’t any reason to be. Some may worry that they have already missed the mark at that point, or that now it has more room to fall. Still, a stock making a new 52-week high is a ‘good thing,’ just as one falling to a new 52-week low is a ‘bad thing.’

On top of that, would the person who doesn’t want to buy stocks making new highs be upset if a stock they owned broke out to a new 52-week high? Statistics have also shown that stocks making new highs have a tendency of making even higher highs. And aren’t these the stocks we all dream about?

Now obviously, the fundamentals need to be there, and you should try to keep an eye on valuations. But if you were in a stock making new highs and cheering it on, it seems odd to be afraid of one doing the same just because you haven't bought it yet.

Think about this: A stock just made a new-52 week high, which is great news. Guess what? Last year it made a new 52-week high as well. And the year before that. And the year before that. Can you imagine all the money you'd be leaving on the table if you were afraid of being in stocks every time they made a new high?

Parameters

• Current Price/52-Week High greater than or equal to .80

• Percent Change in Price over 12 Weeks greater than 0

• Percent Change in Price over 4 Weeks greater than 0

• Zacks Rank equal to 1

• Price/Sales Ratio less than or equal to Industry Median

• P/E (using F1 Estimates) less than or equal to Industry Median

• Projected One Year EPS Growth F(1)/F(0) greater than or equal to Industry Median

• Current Avg. 20-Day Volume greater than Previous Week's Avg. 20-Day Volume

• All of the above parameters are applied to stocks with a Price greater than or equal to $5 and an Average 20-Day Volume of greater than or equal to 100,000 shares.

• Percent Change in Price over 12 Weeks + Percent Change in Price over 4 Weeks equal to Top # 5

Here are two of the five stocks that made it through today’s screen…

Unum Group ((UNM Quick QuoteUNM - Free Report) )

Unum is an insurance firm with a portfolio that features disability, life, accident, critical illness, cancer, dental and vision coverage. UNM topped our quarterly earnings and revenue estimates in early May and boosted its view as its strong 2022 momentum carried over in 2023, driven by “increases in sales and premium across” its “core operations and performance of our group disability business.”

Zacks estimates call for Unum’s adjusted earnings to climb 15% in this year and another 5% next year on around 3% stronger sales during both periods. UNM’s upbeat earnings revisions estimates help it grab a Zacks Rank #1 (Strong Buy) and its most recent analyst estimates are coming in above Unum’s already-improved EPS consensus.

Unum’s Insurance - Accident and Health industry is in the top 6% of over 250 Zacks industries, which is a real positive amid some increasing market uncertainty. UNM’s dividend yields roughly 3% at the moment and its 20% payout ratio leaves it plenty of room to keep boosting its payout.

UNM shares have jumped nearly 200% in the last three years vs. the S&P 500’s 40% and its industry’s 90%. UNM is up 22% in the last 12 months and yet it trades about 14% below its average Zacks price target. Plus, it trades at a 40% discount to its industry at 6.2X forward 12-month earnings.  

Comfort Systems USA, Inc. ((FIX Quick QuoteFIX - Free Report) )

Comfort Systems USA is a leading provider of building systems installation and maintenance in the U.S. Comfort Systems, which is made up of roughly 45 operating companies in over 170 locations, aims to provide mechanical and electrical services, as well as process piping, modular construction, controls, energy efficiency and tons of other nonresidential building renovation and service needs.

The building and service provider for mechanical, electrical, modular, and plumbing building systems crushed our Q1 earnings estimates in late April by 41%. Comfort Systems said its “cash flow was unusually strong, especially for a first quarter” and its “backlog increased yet again, reflecting good ongoing demand in traditional and modular construction.”

FIX boosted its outlook, with its FY23 and FY24 consensus EPS estimates up 13% and 15%, respectively since its report. Comfort Systems is projected to grow its bottom line by 36% this year and 14% next year on 18% and 6% higher revenue.

Comfort Systems is part of the Building Products - Air Conditioner and Heating industry that ranks in the top 8% of over 250 Zacks industries. The firm has raised its dividend by 14% annualized over the last five years and its 12% payout ratio leaves FIX plenty of room to continue this trend.

Comfort Systems shares have soared 1,000% in the last decade, including a 75% run during the past 12 months. Even with FIX’s stellar market and industry-destroying performance, it trades 16% below its average Zacks price target and at a 25% discount to its highly-ranked industry at 20.8X forward 12-month earnings.

Get the rest of the stocks on this list and start looking for the newest companies that fit these criteria. It's easy to do. And it could help you find your next big winner. Start screening for these companies today with a free trial to the Research Wizard. You can do it.

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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/.