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5 Stocks Trading Near 52-Week High That Can Climb Further
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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 (DVA - Free Report) , Beacon Roofing Supply (BECN - Free Report) , Casey's General Stores (CASY - Free Report) , Fluor (FLR - Free Report) and Consolidated Water (CWCO - 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 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.
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 five stocks of the 23 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 remained steady at $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%.
Beacon Roofing Supply is the largest publicly traded distributor of residential and non-residential roofing materials and complementary building products in the United States and Canada. The company is one of the industry's oldest and most recognized distributors.
The company is benefiting from strong residential demand and a solid Coastal Construction Product segment contribution. Furthermore, the emphasis on Ambition 2025 growth initiatives, strategic investments and acquisitions bode well. Continuous investments in greenfield locations are expected to yield 25 new locations in 2023. Additionally, the company also continues to drive growth and enhance its margins through accretive digital initiatives.
The Zacks Consensus Estimate for BECN’s 2023 earnings has increased 1.8% to $7.50 per share in the past 30 days. The company surpassed the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 11.1%.
Casey's General Stores operates convenience stores under the Casey's and Casey's General Store names in 16 states, mainly Iowa, Missouri and Illinois. Casey's offers a comprehensive range of products and services to meet the needs of its customers. In addition to fuel, the stores provide a wide variety of merchandise, including groceries, prepared food, snacks, beverages, tobacco products, health and beauty aids, school supplies, housewares, pet supplies and automotive supplies.
The company’s business operating model, omnichannel capabilities, enhanced customer reach and private-label offerings reinforce its position in the industry. Casey's price and product optimization strategies, increased penetration of private brands and digital engagements are also commendable. The company’s focus on inventory management, technology advancements and data analytics positions it well for future growth.
The Zacks Consensus Estimate for CASY’s fiscal 2024 earnings has increased 9.2% to $12.51 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 17.79%.
Fluor provides engineering, procurement, construction and maintenance services (EPCM) through a number of subsidiaries. Incorporated in September 2000, Fluor also provides operation and maintenance services to major industrial clients. It continues to develop and implement innovative solutions for complex project issues in diverse industries.
The company is benefiting from the solid demand for its engineering and construction solutions, which is reflected in its new award wins. Fluor's third-quarter 2023 total new awards demonstrate that clients are moving forward with capital spending plans in a challenging business environment. The company’s positive advances in large Energy Solutions projects and continued progress in legacy portfolio projects encouraged it to lift its 2023 expectations. For 2023, Fluor now expects adjusted EPS in the range of $2.50-$2.70, up from the prior projection of $2.00-$2.30. Also, the strong performance of its Urban Solutions and Mission Solutions segments added to the uptrend.
The Zacks Consensus Estimate for FLR’s 2023 earnings has increased 3.8% to $2.44 per share in the past 30 days. The company surpassed the Zacks Consensus Estimate twice in the trailing four quarters while missing the same twice, the average surprise being 37.47%.
Consolidated Water, along with its subsidiaries, is involved in the development and operation of seawater desalination plants and water distribution systems in areas where naturally occurring supplies of potable water are scarce or non-existent. The company also focuses on expanding operation in areas having a large proportion of tourist properties and growing population.
The company currently utilizes the most advanced technology to convert seawater to potable water and meet customer needs. It is expanding operations via acquisitions and organic projects. The acquisition of the full ownership of PERC and the return of tourism to the Cayman Islands are expected to drive its earnings. It has enough liquidity to address its short-term debt obligations.
The Zacks Consensus Estimate for CWCO’s 2023 earnings has increased 1.2% to $1.75 per share in the past 30 days. The company surpassed the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 61.56%.
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
5 Stocks Trading Near 52-Week High 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 (DVA - Free Report) , Beacon Roofing Supply (BECN - Free Report) , Casey's General Stores (CASY - Free Report) , Fluor (FLR - Free Report) and Consolidated Water (CWCO - 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 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.
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 five stocks of the 23 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 remained steady at $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%.
Beacon Roofing Supply is the largest publicly traded distributor of residential and non-residential roofing materials and complementary building products in the United States and Canada. The company is one of the industry's oldest and most recognized distributors.
The company is benefiting from strong residential demand and a solid Coastal Construction Product segment contribution. Furthermore, the emphasis on Ambition 2025 growth initiatives, strategic investments and acquisitions bode well. Continuous investments in greenfield locations are expected to yield 25 new locations in 2023. Additionally, the company also continues to drive growth and enhance its margins through accretive digital initiatives.
The Zacks Consensus Estimate for BECN’s 2023 earnings has increased 1.8% to $7.50 per share in the past 30 days. The company surpassed the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 11.1%.
Casey's General Stores operates convenience stores under the Casey's and Casey's General Store names in 16 states, mainly Iowa, Missouri and Illinois. Casey's offers a comprehensive range of products and services to meet the needs of its customers. In addition to fuel, the stores provide a wide variety of merchandise, including groceries, prepared food, snacks, beverages, tobacco products, health and beauty aids, school supplies, housewares, pet supplies and automotive supplies.
The company’s business operating model, omnichannel capabilities, enhanced customer reach and private-label offerings reinforce its position in the industry. Casey's price and product optimization strategies, increased penetration of private brands and digital engagements are also commendable. The company’s focus on inventory management, technology advancements and data analytics positions it well for future growth.
The Zacks Consensus Estimate for CASY’s fiscal 2024 earnings has increased 9.2% to $12.51 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 17.79%.
Fluor provides engineering, procurement, construction and maintenance services (EPCM) through a number of subsidiaries. Incorporated in September 2000, Fluor also provides operation and maintenance services to major industrial clients. It continues to develop and implement innovative solutions for complex project issues in diverse industries.
The company is benefiting from the solid demand for its engineering and construction solutions, which is reflected in its new award wins. Fluor's third-quarter 2023 total new awards demonstrate that clients are moving forward with capital spending plans in a challenging business environment. The company’s positive advances in large Energy Solutions projects and continued progress in legacy portfolio projects encouraged it to lift its 2023 expectations. For 2023, Fluor now expects adjusted EPS in the range of $2.50-$2.70, up from the prior projection of $2.00-$2.30. Also, the strong performance of its Urban Solutions and Mission Solutions segments added to the uptrend.
The Zacks Consensus Estimate for FLR’s 2023 earnings has increased 3.8% to $2.44 per share in the past 30 days. The company surpassed the Zacks Consensus Estimate twice in the trailing four quarters while missing the same twice, the average surprise being 37.47%.
Consolidated Water, along with its subsidiaries, is involved in the development and operation of seawater desalination plants and water distribution systems in areas where naturally occurring supplies of potable water are scarce or non-existent. The company also focuses on expanding operation in areas having a large proportion of tourist properties and growing population.
The company currently utilizes the most advanced technology to convert seawater to potable water and meet customer needs. It is expanding operations via acquisitions and organic projects. The acquisition of the full ownership of PERC and the return of tourism to the Cayman Islands are expected to drive its earnings. It has enough liquidity to address its short-term debt obligations.
The Zacks Consensus Estimate for CWCO’s 2023 earnings has increased 1.2% to $1.75 per share in the past 30 days. The company surpassed the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 61.56%.
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