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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 Wolverine Worldwide (WWW - Free Report) , Signet Jewelers (SIG - Free Report) , Tenet Healthcare Corp. (THC - Free Report) , Louisiana-Pacific (LPX - Free Report) and Silicon Motion (SIMO - Free Report) are expected to maintain their momentum and keep scaling new highs. Extensive 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 21 that made it through the screen:
Wolverine Worldwide is engaged in the designing, manufacturing and distribution of a wide variety of casual as well as active apparel and footwear. The company also manufactures children’s footwear and specially designed boots and accessories for industrial purposes.
Wolverine's transformation plan is yielding impressive results, spearheaded by the remarkable performances of Merrell and Saucony. Key product launches such as Saucony's Ride, Guide 17 and Merrell's Moab Speed 2 are driving growth. The company has strategically invested in brand marketing, fortified its balance sheet, and reduced debt and inventory levels. Wolverine is enhancing consumer engagement through innovative marketing campaigns and expanding its global footprint, notably in Japan. With a renewed focus on product innovation and market positioning, Wolverine is poised for continued growth and increased market share.
The Zacks Consensus Estimate for WWW’s 2024 earnings has moved north by 3.8% to 82 cents per share in the past 30 days. The company matched the Zacks Consensus Estimate twice in the trailing four quarters while missing the same twice, the average negative surprise being 6.25%.
Signet Jewelers is a retailer of diamond jewelry, watches and other products. The company operates in the United States, Canada, the U.K., the Republic of Ireland and the Channel Islands.
Signet Jewelers has been diligently fortifying its digital platform, underscoring its resilience and agility in the ever-evolving retail landscape. The company's core e-commerce operations remain robust, reflecting its adaptability to shifting consumer shopping behaviors. Enhancing the digital platform not only facilitates capturing a larger market share but also bolsters the development of a resilient business model. Signet leverages a sophisticated customer data platform to power targeted marketing initiatives, amplifying consumer engagement and driving sales, particularly in the bridal segment.
The Zacks Consensus Estimate for SIG’s fiscal 2025 earnings has remained steady at $10.6 per share in the past 30 days. The company surpassed the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 26.4%.
Tenet Healthcare is an investor-owned healthcare services company, which owns and operates general hospitals and related health care facilities for urban and rural communities in numerous states, and has offices in California and Florida.
Tenet Healthcare's revenue growth is propelled by rising patient admissions, while its strategy of acquisitions and alliances aims to expand its scale through inorganic growth. The company is undertaking divestitures to streamline operations, eliminating unprofitable businesses and allocating capital to higher-return investments. The strong performance of the Ambulatory Care unit is also driving results, with projected net operating revenues between $4.2 billion and $4.3 billion for 2024. Tenet also benefits from contractual rate increases in its Conifer JV business, further bolstering its financial performance.
The Zacks Consensus Estimate for THC’s 2024 earnings has moved north by 36.9% to $8.42 per share in the past 30 days. The company surpassed the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 56.5%.
Louisiana-Pacific or LP is a leading manufacturer of sustainable, quality engineered wood building materials, structural framing products as well as exterior siding for use in residential, industrial and light commercial construction.
Louisiana-Pacific's growth strategy hinges on strategic acquisitions, business combinations, and the divestiture of low-profitability operations. The company is reaping the rewards of astute business investments and cost-saving initiatives. Its emphasis on the Siding and OSB business segments is paying dividends, underpinned by the belief that sustained demand for environmentally friendly engineered wood siding is supported by long-term market trends and demographic shifts. With a keen focus on optimizing its portfolio and capitalizing on emerging opportunities, Louisiana-Pacific is well-positioned to drive sustainable growth.
The Zacks Consensus Estimate for LPX’s 2024 earnings has moved north by 29.5% to $5.79 per share in the past 30 days. The company beat the Zacks Consensus Estimate thrice in the trailing four quarters while missing the same once, the average surprise being 18.61%.
Silicon Motion Technology is a leading developer of microcontroller ICs for NAND flash storage devices. The semiconductor company also designs, develops and markets high-performance, low-power semiconductor solutions for original equipment manufacturers (“OEM”) and other customers.
Silicon Motion is making strides in expanding its SSD controller program engagements with PC OEMs, as well as eMMC/UFS controllers for smartphones, automotive applications and IoT/smart devices. Equipped with a robust product portfolio and successful collaborations with flash vendors for developing proprietary controller technology, the company is well-positioned to adapt to evolving industry changes. Bolstered by an improving backlog, Silicon Motion is poised for steady growth through 2024, prompting an upward revision of its fiscal guidance, underscoring its positive trajectory.
The Zacks Consensus Estimate for SIMO’s 2024 earnings has moved north by 2.1% to $3.47 per share in the past 30 days. The company beat the Zacks Consensus Estimate thrice in the trailing four quarters while missing the same once, the average surprise being 4.72%.
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 Wolverine Worldwide (WWW - Free Report) , Signet Jewelers (SIG - Free Report) , Tenet Healthcare Corp. (THC - Free Report) , Louisiana-Pacific (LPX - Free Report) and Silicon Motion (SIMO - Free Report) are expected to maintain their momentum and keep scaling new highs. Extensive 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 21 that made it through the screen:
Wolverine Worldwide is engaged in the designing, manufacturing and distribution of a wide variety of casual as well as active apparel and footwear. The company also manufactures children’s footwear and specially designed boots and accessories for industrial purposes.
Wolverine's transformation plan is yielding impressive results, spearheaded by the remarkable performances of Merrell and Saucony. Key product launches such as Saucony's Ride, Guide 17 and Merrell's Moab Speed 2 are driving growth. The company has strategically invested in brand marketing, fortified its balance sheet, and reduced debt and inventory levels. Wolverine is enhancing consumer engagement through innovative marketing campaigns and expanding its global footprint, notably in Japan. With a renewed focus on product innovation and market positioning, Wolverine is poised for continued growth and increased market share.
The Zacks Consensus Estimate for WWW’s 2024 earnings has moved north by 3.8% to 82 cents per share in the past 30 days. The company matched the Zacks Consensus Estimate twice in the trailing four quarters while missing the same twice, the average negative surprise being 6.25%.
Signet Jewelers is a retailer of diamond jewelry, watches and other products. The company operates in the United States, Canada, the U.K., the Republic of Ireland and the Channel Islands.
Signet Jewelers has been diligently fortifying its digital platform, underscoring its resilience and agility in the ever-evolving retail landscape. The company's core e-commerce operations remain robust, reflecting its adaptability to shifting consumer shopping behaviors. Enhancing the digital platform not only facilitates capturing a larger market share but also bolsters the development of a resilient business model. Signet leverages a sophisticated customer data platform to power targeted marketing initiatives, amplifying consumer engagement and driving sales, particularly in the bridal segment.
The Zacks Consensus Estimate for SIG’s fiscal 2025 earnings has remained steady at $10.6 per share in the past 30 days. The company surpassed the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 26.4%.
Tenet Healthcare is an investor-owned healthcare services company, which owns and operates general hospitals and related health care facilities for urban and rural communities in numerous states, and has offices in California and Florida.
Tenet Healthcare's revenue growth is propelled by rising patient admissions, while its strategy of acquisitions and alliances aims to expand its scale through inorganic growth. The company is undertaking divestitures to streamline operations, eliminating unprofitable businesses and allocating capital to higher-return investments. The strong performance of the Ambulatory Care unit is also driving results, with projected net operating revenues between $4.2 billion and $4.3 billion for 2024. Tenet also benefits from contractual rate increases in its Conifer JV business, further bolstering its financial performance.
The Zacks Consensus Estimate for THC’s 2024 earnings has moved north by 36.9% to $8.42 per share in the past 30 days. The company surpassed the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 56.5%.
Louisiana-Pacific or LP is a leading manufacturer of sustainable, quality engineered wood building materials, structural framing products as well as exterior siding for use in residential, industrial and light commercial construction.
Louisiana-Pacific's growth strategy hinges on strategic acquisitions, business combinations, and the divestiture of low-profitability operations. The company is reaping the rewards of astute business investments and cost-saving initiatives. Its emphasis on the Siding and OSB business segments is paying dividends, underpinned by the belief that sustained demand for environmentally friendly engineered wood siding is supported by long-term market trends and demographic shifts. With a keen focus on optimizing its portfolio and capitalizing on emerging opportunities, Louisiana-Pacific is well-positioned to drive sustainable growth.
The Zacks Consensus Estimate for LPX’s 2024 earnings has moved north by 29.5% to $5.79 per share in the past 30 days. The company beat the Zacks Consensus Estimate thrice in the trailing four quarters while missing the same once, the average surprise being 18.61%.
Silicon Motion Technology is a leading developer of microcontroller ICs for NAND flash storage devices. The semiconductor company also designs, develops and markets high-performance, low-power semiconductor solutions for original equipment manufacturers (“OEM”) and other customers.
Silicon Motion is making strides in expanding its SSD controller program engagements with PC OEMs, as well as eMMC/UFS controllers for smartphones, automotive applications and IoT/smart devices. Equipped with a robust product portfolio and successful collaborations with flash vendors for developing proprietary controller technology, the company is well-positioned to adapt to evolving industry changes. Bolstered by an improving backlog, Silicon Motion is poised for steady growth through 2024, prompting an upward revision of its fiscal guidance, underscoring its positive trajectory.
The Zacks Consensus Estimate for SIMO’s 2024 earnings has moved north by 2.1% to $3.47 per share in the past 30 days. The company beat the Zacks Consensus Estimate thrice in the trailing four quarters while missing the same once, the average surprise being 4.72%.
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.