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Find Top Stocks to Buy in October Still Trading Near their Highs

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The selling heated up on Tuesday on the back of hot job openings data that has more of Wall Street nervous that Jay Powell and the Fed will have to lift rates higher and keep them there for longer.

No pocket of the market was safe from the wave of selling through early afternoon trading today, with the S&P 500 now on the cusp of possibly testing its 200-day moving average for the first time since March.

Yet, even with the far hotter-than-projected August job openings data, traders aren’t convinced that the lagging indicator will shake the Fed from what they feel is a wait-and-see holding pattern.

The CME Fed Watch tool currently places a roughly 73% chance of the Fed leaving its core interest rate unchanged at its November meeting. This figure is nearly same as Monday and up from 65% a month ago on September 1.

Zacks Investment Research
Image Source: Zacks Investment Research

With big money on Wall Street still rather sure the Fed is near the end of its rate hiking cycle and the outlook for S&P 500 earnings looking strong for Q4 and 2024, it is possible the market-wide selling could be over sooner than later. Plus, the S&P 500 is now at its most oversold RSI levels since the market bottomed around this time last year.

Investors who want to stay exposed to stocks might want to consider buying top-ranked Zacks stocks that have managed to hold up well during the September selling and are still trading near their 52-week highs.

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?


• 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 is one of the four stocks that made it through today’s screen…

Vistra ((VST - Free Report) )

Vistra is a leading integrated retail electricity and power generation firm. Vistra brings its products and services to market in roughly 20 states, helping to serve nearly 4 million residential, commercial, and industrial retail customers with electricity and natural gas.

Vistra is one of the largest competitive electricity providers in the country and offers over 50 renewable energy plans. VST’s diverse portfolio includes natural gas, nuclear, solar, and battery energy storage facilities, and more.

VST shares have soared 38% YTD to blow away the S&P 500’s 13% gain and its industry’s 21% tumble. This run includes a 23% surge over the past three months.

Vistra stock has skyrocketed 80% during the last 36 months to crush its industry’s 15% decline and the benchmark’s 27% gain. Even with its stellar market and industry-beating performance, Vistra stock trades 21% below its current average Zacks price target.

Zacks Investment Research
Image Source: Zacks Investment Research

VST stock has slipped about 7% from its September peaks after it climbed too far above its 50-day moving average. On top of that, Vistra trades at a 36% discount to the Zacks Utilities sector at 7.8X forward 12-month earnings. Plus, all four of the brokerage recommendations Zacks has are “Strong Buys.”

VST’s revenue is projected to soar 48% this year and another 7.5% next year. Better yet, Vistra is projected to swing from an adjusted loss of -$2.94 a share to +$3.54 per share this year and then surge another 24% next year. Vistra’s upbeat earnings outlook helps it land its Zacks Rank #1 (Strong Buy) right now.

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.

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