Investors generally consider a stock's 52-week high a good criterion for an entry or exit point. 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 speculation is not absolutely baseless, not all stocks hitting a 52-week high are necessarily overpriced.

Investors might lose out on top gainers in an attempt to avoid the steep prices.

Stocks such as NVIDIA (NVDA Quick QuoteNVDA - Free Report) , Ralph Lauren (RL Quick QuoteRL - Free Report) , Expedia (EXPE Quick QuoteEXPE - Free Report) and Cencora, Inc. (COR Quick QuoteCOR - Free Report) are expected to maintain their momentum and keep scaling new highs. More information on a stock is necessary to determine whether 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 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.

Overvaluation is natural for most of these stocks as investors’ focus (or willingness to pay the premium) has helped them reach this level. But that does not always indicate an impending decline. Factors such as robust sales, surging profit levels, earnings growth prospects and strategic acquisitions, which encouraged investors to bet on these stocks, could keep them motivated if there are no tangible negatives. In other words, the momentum might continue.

Also, when a string of positive developments dominates the market, investors find their underreaction 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 and sales, ensuring the continuation of their rally for some time.

Current Price/52 Week High >= .80: 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 0.8 implies the stock is trading within 20% of its 52-week high range.

% Change Price – 4 Weeks > 0: This 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 >= 5: This parameter will help screen stocks that are trading at $5 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 our four picks out of the 11 stocks that made it through the screen:

NVIDIA is benefiting from the strong growth of AI and high-performance accelerated computing. The growing demand for generative AI and large language models using graphics processing units (GPUs) based on NVIDIA’s Hopper and Blackwell architectures is aiding data center revenues. This Zacks Rank #1 company’s networking business, including NVLink and Spectrum-X, is also contributing to growth by enabling faster and more efficient data movement within AI clusters. These add-ons make NVIDIA’s full-stack approach more appealing to enterprises and governments building AI infrastructure. 

The continued ramp-up of Ada RTX GPU workstations in the ProViz end market, following the normalization of channel inventory, is acting as a tailwind. Collaborations with more than 320 automakers and tier-one suppliers are likely to advance its presence in the autonomous vehicle space. We expect NVIDIA’s revenues to witness a CAGR of 31% through fiscal 2026-2028.

This Zacks Rank #1 stock has returned 25.5% in the past six-month period. It has a trailing four-quarter earnings surprise of 2.77%, on average. The Zacks Consensus Estimate for NVDA’s fiscal 2026 earnings has moved north by 4% to $4.64 per share over the past 60 days.

Ralph Lauren continues to benefit from its iconic brand portfolio, constant product innovations and disciplined execution of its Next Great Chapter strategy. The company is accelerating its digital transformation by enhancing personalization, strengthening data-driven decision-making and delivering seamless omnichannel experiences.

Ralph Lauren is optimizing distribution, strengthening wholesale partnerships and enhancing its retail network to reinforce its premium positioning. The company has been experiencing significant growth in its digital channels across key regions. Leveraging advanced analytics, RL customizes product recommendations, optimizes pricing and sharpens its regional marketing strategies to drive stronger consumer engagement and profitability.

This Zacks Rank #2 stock has returned 34% in the past six-month period. It has a trailing four-quarter earnings surprise of 9.82%, on average. The Zacks Consensus Estimate for RL’s fiscal 2026 earnings has moved north by 3% to $15.41 per share over the past 60 days.

Expedia’s strong brand portfolio, comprising Brand Expedia, Hotels.com, Vrbo, Orbitz, Travelocity, ebookers and Wotif Group, to name a few, offers a full range of travel and advertising services to travelers, suppliers and business partners. The company benefits from a strong platform model that enhances customer insights, strengthens supplier ties and helps grow revenues. Expedia looks like a compelling buy for 2026 following strong third-quarter 2025 results. The company’s $7.57 adjusted EPS beat estimates, and gross bookings grew 12%. The company raised its full-year 2025 guidance to 7% bookings growth and doubled EBITDA margin expansion projections to 200 basis points, demonstrating operational excellence.

Expedia's December 2025 acquisition of Tiqets strengthens its B2B segment, which delivered its 17th consecutive quarter of double-digit growth at 26%. With AI integration enhancing efficiency, hotel bookings surging 15%, and room nights growing 11%, this Zacks Rank #1 company's diversified platform positions it to capitalize on robust travel demand and expanding profit margins throughout 2026.

This stock has surged 74.4% in the past six-month period. It has a trailing four-quarter earnings surprise of 4.53%, on average. The Zacks Consensus Estimate for EXPE’s 2025 earnings has moved north by 6.8% to $15.09 per share over the past 60 days.

Cencora is navigating a pivotal growth phase, balancing robust revenue expansion with structural margin challenges. Specialty expansion, notably through RCA and OneOncology, strengthens its clinical and distribution footprint and boosts higher-margin opportunities. The company recently agreed to acquire a majority of the remaining equity interests in OneOncology — a physician-led national platform that supports independent oncology practices — from TPG and other shareholders for $3.6 billion. 

COR issued its fiscal 2026 adjusted EPS outlook to be in the $17.45-$17.75 range, implying 9-11% growth. Ongoing investments in digital infrastructure, analytics, productivity programs, and strategic growth areas such as specialty distribution and MSO platforms are expected to enhance operational efficiency, deepen customer integration and sustain long-term competitive advantage. 

This Zacks Rank #2 stock has returned 16.3% in the past six-month period. It has a trailing four-quarter earnings surprise of 1.36%, on average. The Zacks Consensus Estimate for COR’s fiscal 2026 earnings has moved north by 1.4% to $17.62 per share over the past 60 days.

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.

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/.