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.
4 Stocks Trading Near 52-Week Highs with More Upside Potential
Investors generally consider 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.
Stocks such as JAKKS Pacific, GIII Apparel Group, Brinker International and CNA Financial 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 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.
Here are our four picks of the 14 stocks that made it through the screen:
JAKKS Pacific is a multi-brand company that has been designing and marketing a broad range of toys and consumer products since 1995. The company is capitalizing on its well-established global presence, emphasis on inventive approaches, and partnerships with renowned brands and film franchises.
We consider the company's ability to successfully identify, close and integrate acquisitions to be one of its primary competitive advantages. Meanwhile, it has collaborations with Disney, Skechers, Nickelodeon, Cabbage Patch Kids and Chico to manufacture toys and merchandise related to these brands. JAKK focuses on expanding its reach to include prominent accounts such as Macy's and Amazon in the United States and Sainsbury's in the U.K.
The Zacks Consensus Estimate for JAKK's 2023 earnings has moved north by 13.9% to $5.17 per share in the past 30 days. The company surpassed the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 61.8%.
G-III Apparel Group is a manufacturer, designer and distributor of apparel and accessories under licensed brands, owned brands and private label brands. G-III Apparel's strategic priorities include driving power brands across categories, enhancing its portfolio via ownership of brands and licensing opportunities, expanding its global reach, maximizing omnichannel capabilities and scaling the private label business.
G-III Apparel has also been making progress on rightsizing the inventory. Management remains optimistic about the company's diversified portfolio of key brands, namely DKNY, Donna Karan, Karl Lagerfeld, Vilebrequin, Nautica and Halston.
The Zacks Consensus Estimate for GIII's fiscal 2024 earnings has increased by 15.9% to $3.79 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 541.81%.
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 a 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. Brinker is also developing a more advanced CRM program to boost customer frequency.
The Zacks Consensus Estimate for EAT's fiscal 2024 earnings has increased 0.8% 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 0.5% 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%.
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 Research Wizard trial 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.
About Screen of the Week
Zacks.com created the first and best screening system on the web earning the distinction as the "#1 site for screening stocks" by Money Magazine. But powerful screening tools is just the start. That is why Zacks created the Screen of the Week to highlight profitable stock picking strategies that investors can actively use.
Strong Stocks that Should Be in the News
Many are little publicized and fly under the Wall Street radar. They're virtually unknown to the general public. Yet today's 220 Zacks Rank #1 "Strong Buys" were generated by the stock-picking system that has more than doubled the market from 1988 through 2016. Its average gain has been a stellar +25% per year. See these high-potential stocks free >>.
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/performancefor information about the performance numbers displayed in this press release.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Zacks.com featured highlights include JAKKS Pacific, GIII Apparel Group, Brinker International and CNA Financial
For Immediate Release
Chicago, IL – December 14, 2023 – Stocks in this week’s article are JAKKS Pacific (JAKK - Free Report) , GIII Apparel Group (GIII - Free Report) , Brinker International (EAT - Free Report) and CNA Financial (CNA - Free Report) .
4 Stocks Trading Near 52-Week Highs with More Upside Potential
Investors generally consider 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.
Stocks such as JAKKS Pacific, GIII Apparel Group, Brinker International and CNA Financial 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 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.
Here are our four picks of the 14 stocks that made it through the screen:
JAKKS Pacific is a multi-brand company that has been designing and marketing a broad range of toys and consumer products since 1995. The company is capitalizing on its well-established global presence, emphasis on inventive approaches, and partnerships with renowned brands and film franchises.
We consider the company's ability to successfully identify, close and integrate acquisitions to be one of its primary competitive advantages. Meanwhile, it has collaborations with Disney, Skechers, Nickelodeon, Cabbage Patch Kids and Chico to manufacture toys and merchandise related to these brands. JAKK focuses on expanding its reach to include prominent accounts such as Macy's and Amazon in the United States and Sainsbury's in the U.K.
The Zacks Consensus Estimate for JAKK's 2023 earnings has moved north by 13.9% to $5.17 per share in the past 30 days. The company surpassed the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 61.8%.
G-III Apparel Group is a manufacturer, designer and distributor of apparel and accessories under licensed brands, owned brands and private label brands. G-III Apparel's strategic priorities include driving power brands across categories, enhancing its portfolio via ownership of brands and licensing opportunities, expanding its global reach, maximizing omnichannel capabilities and scaling the private label business.
G-III Apparel has also been making progress on rightsizing the inventory. Management remains optimistic about the company's diversified portfolio of key brands, namely DKNY, Donna Karan, Karl Lagerfeld, Vilebrequin, Nautica and Halston.
The Zacks Consensus Estimate for GIII's fiscal 2024 earnings has increased by 15.9% to $3.79 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 541.81%.
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 a 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. Brinker is also developing a more advanced CRM program to boost customer frequency.
The Zacks Consensus Estimate for EAT's fiscal 2024 earnings has increased 0.8% 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 0.5% 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%.
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 Research Wizard trial 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/2197145/4-stocks-trading-near-52-week-high-with-more-upside-potential
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.
About Screen of the Week
Zacks.com created the first and best screening system on the web earning the distinction as the "#1 site for screening stocks" by Money Magazine. But powerful screening tools is just the start. That is why Zacks created the Screen of the Week to highlight profitable stock picking strategies that investors can actively use.
Strong Stocks that Should Be in the News
Many are little publicized and fly under the Wall Street radar. They're virtually unknown to the general public. Yet today's 220 Zacks Rank #1 "Strong Buys" were generated by the stock-picking system that has more than doubled the market from 1988 through 2016. Its average gain has been a stellar +25% per year. See these high-potential stocks free >>.
Follow us on Twitter: https://www.twitter.com/zacksresearch
Join us on Facebook: https://www.facebook.com/ZacksInvestmentResearch
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.
Contact: Jim Giaquinto
Company: Zacks.com
Phone: 312-265-9268
Email: pr@zacks.com
Visit: https://www.zacks.com/
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/performancefor information about the performance numbers displayed in this press release.