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4 Stocks Trading Near 52-Week Highs That Can Climb Further
Stocks hitting their 52-week high and delivering consistent performance 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 DaVita, Brinker International, CNA Financial and Integer Holdings 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 times, stocks that hit 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.
Here are four stocks of the 11 that made it through the screen:
DaVita is a leading provider of dialysis services in the United States to patients suffering from chronic kidney failure, also known as end-stage renal disease. Per management, DaVita has been witnessing improvements in census and treatments per day over the past few months, reflecting a better macro environment and progress in the company’s operating initiatives. The company has been expanding its global presence via its Integrated Kidney Care business.
It has been generating solid revenues by providing dialysis services. As of Sep 30, 2023, DaVita provided dialysis services to around 249,100 patients at 3,053 outpatient dialysis centers, of which 2,694 were U.S. centers while 359 were located across 11 other countries. DaVita has been opening and acquiring several dialysis centers, both within the United States and overseas, which is promising. A strong solvency position is an added plus.
The Zacks Consensus Estimate for DVA’s 2023 earnings has increased 9.2% to $8.07 per share in the past 30 days. The company surpassed the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 36.55%.
Brinker International owns, operates, develops and franchises various restaurants under Chili’s Grill & Bar (Chili’s) and Maggiano’s Little Italy (Maggiano’s) brands. Brinker remains steadfast in its goal to drive traffic and revenues through a range of sales-building initiatives such as streamlining its menu and its innovation, strengthening its value proposition, improving food presentation and launching advertising campaigns.
The company is benefiting from improved menu pricing and a favorable menu item mix. Also, focus on various sales-building and expansion initiatives bodes well. The company continues to focus on Chili’s international expansion through development agreements with new and existing franchise partners. Chili’s turnaround strategies yielded positive results, with traffic and sales moving in the positive direction. The company emphasizes the brand's new restaurant development to drive growth. Chili’s has 11-12 new domestic openings and 19-24 new international openings scheduled for fiscal 2024. Blinker is also developing a more advanced CRM program to boost customer frequency.
The Zacks Consensus Estimate for EAT’s fiscal 2024 earnings has increased 7.9% to $3.57 per share in the past 30 days. The company surpassed the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 223.6%.
CNA Financial is one of the most versatile property and casualty (P&C) insurers, maintaining combined ratio at favorable levels despite a tough operating environment. This, in turn, leads to underwriting profitability. It offers commercial P&C insurance products, mainly across the United States. CNA Financial remains well-poised to gain from a rise in new businesses, strong rate, lower net catastrophe losses, improved non-catastrophe current accident year underwriting results and higher net earned premium, which contribute to premium growth across its Specialty, Commercial and International segments.
CNA Financial’s fixed-income investment strategy with the highest allocations to diversified investment grade corporates as well as highly rated municipal securities should support investment results in the near term. CNA has been able to maintain the underlying combined ratio below 95 for 13 straight quarters. Through targeted portfolio management strategies, the company made significant progress in successfully repositioning the portfolio underwritten via Lloyd’s syndicate in its effort to improve the overall underwriting results of its international operation.
The Zacks Consensus Estimate for CNA’s 2023 earnings has increased 2.8% to $4.41 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 9.24%.
Integer Holdings manufactures and develops medical devices and components primarily for original equipment manufacturers (OEMs). The company is focused on developing new products, improving and enhancing existing products, and expanding the use of its products in new or tangential applications. In addition to its internal technology and capability development efforts aimed at providing its customers with differentiated solutions, the company engages outside research institutions for unique technology projects.
Integer Holdings has a stable footprint in the cardiac, neuromodulation, orthopedics, vascular and advanced surgical markets. Its primary customers include large, multi-national original equipment manufacturers and their affiliated subsidiaries. ITGR is focused on sales efforts to increase its market penetration in the Cardio & Vascular, Neuromodulation and Non-Medical Electrochem markets. The company is undertaking strategic initiatives to maintain its leadership position in the cardiac rhythm management market.
The Zacks Consensus Estimate for ITGR’s 2023 earnings has increased 2% to $4.6 per share in the past 30 days. The company surpassed the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 11.98%.
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.
Since 2000, our top stock-picking strategies have blown away the S&P's +6.2 average gain per year. Amazingly, they soared with average gains of +46.4%, +49.5% and +55.2% per year. Today you can access their live picks without cost or obligation.
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer. Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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Zacks.com featured highlights DaVita, Brinker International, CNA Financial and Integer Holdings
For Immediate Release
Chicago, IL – November 30, 2023 – Stocks in this week’s article are DaVita (DVA - Free Report) , Brinker International (EAT - Free Report) , CNA Financial (CNA - Free Report) and Integer Holdings (ITGR - Free Report) .
4 Stocks Trading Near 52-Week Highs That Can Climb Further
Stocks hitting their 52-week high and delivering consistent performance 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 DaVita, Brinker International, CNA Financial and Integer Holdings 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 times, stocks that hit 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.
Here are four stocks of the 11 that made it through the screen:
DaVita is a leading provider of dialysis services in the United States to patients suffering from chronic kidney failure, also known as end-stage renal disease. Per management, DaVita has been witnessing improvements in census and treatments per day over the past few months, reflecting a better macro environment and progress in the company’s operating initiatives. The company has been expanding its global presence via its Integrated Kidney Care business.
It has been generating solid revenues by providing dialysis services. As of Sep 30, 2023, DaVita provided dialysis services to around 249,100 patients at 3,053 outpatient dialysis centers, of which 2,694 were U.S. centers while 359 were located across 11 other countries. DaVita has been opening and acquiring several dialysis centers, both within the United States and overseas, which is promising. A strong solvency position is an added plus.
The Zacks Consensus Estimate for DVA’s 2023 earnings has increased 9.2% to $8.07 per share in the past 30 days. The company surpassed the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 36.55%.
Brinker International owns, operates, develops and franchises various restaurants under Chili’s Grill & Bar (Chili’s) and Maggiano’s Little Italy (Maggiano’s) brands. Brinker remains steadfast in its goal to drive traffic and revenues through a range of sales-building initiatives such as streamlining its menu and its innovation, strengthening its value proposition, improving food presentation and launching advertising campaigns.
The company is benefiting from improved menu pricing and a favorable menu item mix. Also, focus on various sales-building and expansion initiatives bodes well. The company continues to focus on Chili’s international expansion through development agreements with new and existing franchise partners. Chili’s turnaround strategies yielded positive results, with traffic and sales moving in the positive direction. The company emphasizes the brand's new restaurant development to drive growth. Chili’s has 11-12 new domestic openings and 19-24 new international openings scheduled for fiscal 2024. Blinker is also developing a more advanced CRM program to boost customer frequency.
The Zacks Consensus Estimate for EAT’s fiscal 2024 earnings has increased 7.9% to $3.57 per share in the past 30 days. The company surpassed the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 223.6%.
CNA Financial is one of the most versatile property and casualty (P&C) insurers, maintaining combined ratio at favorable levels despite a tough operating environment. This, in turn, leads to underwriting profitability. It offers commercial P&C insurance products, mainly across the United States. CNA Financial remains well-poised to gain from a rise in new businesses, strong rate, lower net catastrophe losses, improved non-catastrophe current accident year underwriting results and higher net earned premium, which contribute to premium growth across its Specialty, Commercial and International segments.
CNA Financial’s fixed-income investment strategy with the highest allocations to diversified investment grade corporates as well as highly rated municipal securities should support investment results in the near term. CNA has been able to maintain the underlying combined ratio below 95 for 13 straight quarters. Through targeted portfolio management strategies, the company made significant progress in successfully repositioning the portfolio underwritten via Lloyd’s syndicate in its effort to improve the overall underwriting results of its international operation.
The Zacks Consensus Estimate for CNA’s 2023 earnings has increased 2.8% to $4.41 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 9.24%.
Integer Holdings manufactures and develops medical devices and components primarily for original equipment manufacturers (OEMs). The company is focused on developing new products, improving and enhancing existing products, and expanding the use of its products in new or tangential applications. In addition to its internal technology and capability development efforts aimed at providing its customers with differentiated solutions, the company engages outside research institutions for unique technology projects.
Integer Holdings has a stable footprint in the cardiac, neuromodulation, orthopedics, vascular and advanced surgical markets. Its primary customers include large, multi-national original equipment manufacturers and their affiliated subsidiaries. ITGR is focused on sales efforts to increase its market penetration in the Cardio & Vascular, Neuromodulation and Non-Medical Electrochem markets. The company is undertaking strategic initiatives to maintain its leadership position in the cardiac rhythm management market.
The Zacks Consensus Estimate for ITGR’s 2023 earnings has increased 2% to $4.6 per share in the past 30 days. The company surpassed the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 11.98%.
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.
For the rest of this Screen of the Week article please visit Zacks.com at: https://www.zacks.com/stock/news/2190673/4-stocks-trading-near-52-week-high-that-can-climb-further
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.
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Since 2000, our top stock-picking strategies have blown away the S&P's +6.2 average gain per year. Amazingly, they soared with average gains of +46.4%, +49.5% and +55.2% per year. Today you can access their live picks without cost or obligation.
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Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer. Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.