We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
3 Stocks Trading Near 52-Week High That Can Climb Further
Read MoreHide Full Article
Stocks hitting their 52-week high and delivering consistent performance in the past few quarters offer attractive opportunities to investors while building a portfolio. This is because stocks near that level are perceived to be winners. However, stocks touching a new 52-week high 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.
Stocks such as Guess? (GES - Free Report) , Constellation Energy Corporation (CEG - Free Report) and Stride (LRN - Free Report) are expected to maintain their momentum and keep scaling new highs. 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 strategy borrows from the basics of momentum investing. This technique 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.
In fact, overvaluation is natural for most of these stocks as investors’ focus (or willingness to pay a 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 >= .8
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 0.11 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 <= XIndMed
The lower, the better.
P/E using F(1) Estimate <= XIndMed
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 its 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 >= 8
This parameter will help screen stocks that are trading at $8 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 three stocks of the five that made it through the screen:
Guess?, Inc. designs, markets, distributes and licenses casual apparel and accessories for men, women and children per American lifestyle and European fashion sensibilities. The company’s Europe segment has been witnessing solid retail store sales, whereas increased consumer activity in Korea has been driving its Asia segment.
GES remains focused on improving its customers’ experiences by upgrading its store and e-commerce infrastructure to increase customer conversion. It upgraded its store infrastructure, including implementing mobile point-of-sale check-out, Salesforce Customer 360 and a real-time inventory and sales dashboard. Guess? has also been improving e-commerce operations by undertaking efforts such as better data capture, improved customer profiling, personalized marketing and relationship management. These efforts are expected to help the company enhance its customer base and enrich its experience, which, in turn, are likely to aid sales.
The company currently sports a Zacks Rank of 1. The Zacks Consensus Estimate for GES’s fiscal 2024 earnings has remained steady at $3.01 per share in the past 30 days. The company surpassed the Zacks Consensus Estimate thrice in the trailing four quarters while missing the same once, the average surprise being 43.37%.
Constellation Energy generates and markets electricity. Its operating segment consists of Mid-Atlantic, Midwest, New York, ERCOT and Other Power Regions. The company sells natural gas, renewable energy and other energy-related products and services. Constellation Energy plans to invest nearly $7.6 billion during the 2023-2025 period to strengthen its operation further and generate more clean energy. Amid the ongoing conflict between Russia and Ukraine, the company decided to utilize nearly 45-47% of projected capital expenditures to acquire nuclear fuel, including additional nuclear fuel to increase inventory levels that will ensure clean power production from its nuclear units.
In June 2023, CEG announced a deal to acquire NRG Energy’s 44% ownership stake in the South Texas Project Electric Generating Station, a 2,645-megawatts (MWs) dual-unit nuclear plant. This acquisition is expected to close at the end of 2023, which will expand the clean energy production portfolio of the company.
The company currently sports a Zacks Rank of 1. The Zacks Consensus Estimate for CEG’s 2023 earnings has moved north by 1.1% to $5.53 per share in the past 30 days. The company surpassed the Zacks Consensus Estimate once in the trailing four quarters while missing the same thrice, the average negative surprise being 22.95%.
Stride is a premier provider of K-12 education for students, schools and districts, including career learning services through middle and high school curriculum. Stride’s Career Learning segment is thriving considering the various growth initiatives undertaken to support the uptrend. After the acquisition of three adult learning companies, Galvanize, Tech Elevator, and MedCerts, in 2020, the company’s product offerings in this segment expanded notably.
The hybrid nature (in-person or online) of the training programs of these brands contribute to the growth of this segment. The company is optimistic about achieving its long-term 2025 goal, given the boost in enrollment demand. For the long term, Stride projects $1.9-$2.2 billion of revenues and $250-$350 million of adjusted operating income. Also, it expects the gross margin to be between 36% and 39%.
The company currently sports a Zacks Rank of 1. The Zacks Consensus Estimate for LRN’s fiscal 2024 earnings has remained steady at $3.27 per share in the past 30 days. The company surpassed the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 44.31%.
Get the rest of the stocks on the list and start putting this and other ideas to the test. It can all be done with the Research Wizard stock picking and back testing software.
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.
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.
Image: Bigstock
3 Stocks Trading Near 52-Week High That Can Climb Further
Stocks hitting their 52-week high and delivering consistent performance in the past few quarters offer attractive opportunities to investors while building a portfolio. This is because stocks near that level are perceived to be winners. However, stocks touching a new 52-week high 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.
Stocks such as Guess? (GES - Free Report) , Constellation Energy Corporation (CEG - Free Report) and Stride (LRN - Free Report) are expected to maintain their momentum and keep scaling new highs. 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 strategy borrows from the basics of momentum investing. This technique 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.
In fact, overvaluation is natural for most of these stocks as investors’ focus (or willingness to pay a 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 >= .8
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 0.11 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 <= XIndMed
The lower, the better.
P/E using F(1) Estimate <= XIndMed
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 its 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 >= 8
This parameter will help screen stocks that are trading at $8 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 three stocks of the five that made it through the screen:
Guess?, Inc. designs, markets, distributes and licenses casual apparel and accessories for men, women and children per American lifestyle and European fashion sensibilities. The company’s Europe segment has been witnessing solid retail store sales, whereas increased consumer activity in Korea has been driving its Asia segment.
GES remains focused on improving its customers’ experiences by upgrading its store and e-commerce infrastructure to increase customer conversion. It upgraded its store infrastructure, including implementing mobile point-of-sale check-out, Salesforce Customer 360 and a real-time inventory and sales dashboard. Guess? has also been improving e-commerce operations by undertaking efforts such as better data capture, improved customer profiling, personalized marketing and relationship management. These efforts are expected to help the company enhance its customer base and enrich its experience, which, in turn, are likely to aid sales.
The company currently sports a Zacks Rank of 1. The Zacks Consensus Estimate for GES’s fiscal 2024 earnings has remained steady at $3.01 per share in the past 30 days. The company surpassed the Zacks Consensus Estimate thrice in the trailing four quarters while missing the same once, the average surprise being 43.37%.
Constellation Energy generates and markets electricity. Its operating segment consists of Mid-Atlantic, Midwest, New York, ERCOT and Other Power Regions. The company sells natural gas, renewable energy and other energy-related products and services. Constellation Energy plans to invest nearly $7.6 billion during the 2023-2025 period to strengthen its operation further and generate more clean energy. Amid the ongoing conflict between Russia and Ukraine, the company decided to utilize nearly 45-47% of projected capital expenditures to acquire nuclear fuel, including additional nuclear fuel to increase inventory levels that will ensure clean power production from its nuclear units.
In June 2023, CEG announced a deal to acquire NRG Energy’s 44% ownership stake in the South Texas Project Electric Generating Station, a 2,645-megawatts (MWs) dual-unit nuclear plant. This acquisition is expected to close at the end of 2023, which will expand the clean energy production portfolio of the company.
The company currently sports a Zacks Rank of 1. The Zacks Consensus Estimate for CEG’s 2023 earnings has moved north by 1.1% to $5.53 per share in the past 30 days. The company surpassed the Zacks Consensus Estimate once in the trailing four quarters while missing the same thrice, the average negative surprise being 22.95%.
Stride is a premier provider of K-12 education for students, schools and districts, including career learning services through middle and high school curriculum. Stride’s Career Learning segment is thriving considering the various growth initiatives undertaken to support the uptrend. After the acquisition of three adult learning companies, Galvanize, Tech Elevator, and MedCerts, in 2020, the company’s product offerings in this segment expanded notably.
The hybrid nature (in-person or online) of the training programs of these brands contribute to the growth of this segment. The company is optimistic about achieving its long-term 2025 goal, given the boost in enrollment demand. For the long term, Stride projects $1.9-$2.2 billion of revenues and $250-$350 million of adjusted operating income. Also, it expects the gross margin to be between 36% and 39%.
The company currently sports a Zacks Rank of 1. The Zacks Consensus Estimate for LRN’s fiscal 2024 earnings has remained steady at $3.27 per share in the past 30 days. The company surpassed the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 44.31%.
Get the rest of the stocks on the list and start putting this and other ideas to the test. It can all be done with the Research Wizard stock picking and back testing software.
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