For Immediate Release
Chicago, IL – Dec 7, 2017 - Stocks in this week’s article include: Daqo New Energy Corp. (DQ - Free Report) , Kennametal Inc. (KMT - Free Report) , DXC Technology Company (DXC - Free Report) , Stifel Financial Corp. (SF - Free Report) and Arbor Realty Trust Inc. (ABR - Free Report) .
Screen of the Week of Zacks Investment Research:
5 Stocks Near 52-Week High with Scope to Scale Further
While betting on a stock near its 52-week high, investors are faced with one of the trickiest questions — will the stock scale higher or are it the right time to book profits?
Though betting on 52-week high stocks without a foolproof investment plan is perilous and even naïve, clubbing it with the correct parameters can turn the tide in investors’ favor.
In this screening article, we discuss the 52-week investment plan. While market analysts may be divided in their opinion regarding the 52-week high investment technique, many of them believe that 52-week high stocks which are still undervalued and have strong upside potential can be lucrative bets.
52-Week High: A Good Indicator
Stocks near 52-week highs often instill the presumptive “adjustment and anchoring bias” in the minds of investors. This principle works on the belief that investors use the 52-week high price as a reference point and value stocks against this anchor.
Many a times, such stocks are prevented from scaling higher despite robust potential due to the psychological bias of investors who fear that the stocks are overvalued and a price crash is impending.
A few of the stocks remain undervalued due to prolonged under reaction on part of investors despite bullish growth drivers. Meanwhile, news pertaining to robust sales, surging profit levels, bullish earnings prospects and strategic acquisitions can drive the stock higher.
However, when a string of positive developments dominate the market, investors find their under-reaction unwarranted and the renewed interest might drive stocks beyond the 52-week high bar. Wall Street’s fast paced trading makes it imperative for investors to step in before the market gets a whiff of it.
Also, recent academic research reveals that if a stock’s current price is near its 52-week high, there are high chances that it will outperform peers in the subsequent period. According to researchers George and Hwang, holding 52-week high stocks for six months resulted in an average monthly gain of 0.45% between 1963 and 2001. Encouragingly, this is twice the gain that can be garnered from similar momentum-based strategies.
And that's what we're screening for today…
For the rest of this Screen of the Week article please visit Zacks.com at: https://www.zacks.com/stock/news/285121/5-stocks-near-52week-high-with-scope-to-scale-higher
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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
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Strong Stocks that Should Be in the News
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Contact: Jim Giaquinto
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