Stocks hitting their 52-week high and delivering consistent performances 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. 

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.

Investors might lose out on top gainers in an attempt to avoid the steep prices.
 
Stocks such as Strategic Education (STRA Quick QuoteSTRA - Free Report) , Seanergy Maritime Holdings (SHIP Quick QuoteSHIP - Free Report) , DaVita (DVA Quick QuoteDVA - Free Report) and FirstEnergy (FE Quick QuoteFE - 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 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.

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 encourage 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 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 as well as sales, ensuring the continuation of their rally for some time.

Current Price/52 Week High >= .11: 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.

1-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 <=2: 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) or #2 (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 our four picks out of the 10 stocks that made it through the screen:

Strategic Education is well-positioned to deliver sustained growth in 2026, driven by accelerating momentum within its high-margin Education Technology Services (“ETS”) segment. Sophia Learning's subscriber base surged approximately 47%, while ETS revenues climbed 28.3% in fourth-quarter 2025, signaling durable demand for affordable, employer-sponsored education. Workforce Edge continues expanding its employer network, recently onboarding NUC University as the first Spanish-language program provider, broadening its reach to underserved workforce demographics. A new partnership with EoS Fitness further expands Sophia Learning's addressable market. AI-enabled productivity initiatives are structurally lifting operating margins, positioning 2026 for meaningful operating leverage gains. The company's consistent 60 cents quarterly dividend and disciplined capital return program reflect free cash flow generation and management's confidence in the long-term business outlook.

The Zacks Consensus Estimate for this Zacks Rank #1 company’s 2026 earnings has moved 7.6% north to $6.97 per share in the past 60 days. The company surpassed the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 19.88%.

Seanergy Maritime Holdings, the only pure-play Capesize operator on a U.S. exchange, is strategically positioned for a strong 2026. In March 2026, the company expanded its newbuilding program to five vessels — four Capesizes and one Newcastlemax — totaling approximately $384 million, centered on modern, scrubber-fitted, fuel-efficient tonnage at top-tier Japanese shipyards. It simultaneously monetized an aging vessel for $29.5 million, recycling capital into fleet renewal. Commercially, approximately 45% of second-quarter till the fourth quarter of 2026 operating days are secured at an average gross daily rate of $29,300, providing clear earnings visibility. The February 2026 declaration of the 17th consecutive quarterly dividend reinforces durable capital return discipline. Resolution of legacy litigation eliminates a key overhang, clearing the runway for sustained operational and financial growth.

The Zacks Consensus Estimate for this Zacks Rank #1 company’s 2026 earnings has moved 28.1% north to $1.87 per share in the past 60 days. Its earnings surpassed the Zacks Consensus Estimate in three of the trailing four quarters, the average surprise being 76.43%.

DaVita is well-positioned for meaningful growth in 2026, anchored by strong operational momentum and an accelerating strategy across the kidney care continuum. In February 2026, the company issued robust full-year guidance, underscoring confidence in meaningfully higher adjusted earnings and strong free cash flow generation. A strategic investment in Elara Caring, announced the same month, positions DaVita to co-develop a first-of-its-kind kidney-specific home care model, expanding its addressable market beyond traditional dialysis centers. With approximately 66,000 patients enrolled in risk-based integrated kidney care arrangements representing $5.6 billion in annualized medical spend, the value-based care platform is scaling rapidly. An ongoing share repurchase program, with $200 million deployed in early 2026, further reinforces management's conviction in DaVita's long-term earnings trajectory.

The Zacks Consensus Estimate for this Zacks Rank #2 company’s 2026 earnings has moved 12.6% north to $14.16 per share in the past 60 days. The company surpassed the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 1.2%.

FirstEnergy is well-positioned for strong fundamental growth in 2026. The company's expanded Energize365 capital program — a $36-billion, five-year investment plan representing a nearly 30% increase over the previous program — is a compelling growth catalyst. The plan allocates more than $19 billion to high-voltage transmission infrastructure, targeting 10% compounded annual rate base growth through 2030 and a Core Earnings CAGR near the top end of 6-8%. Management reaffirmed the 2026 Core Earnings guidance of $2.62-$2.82 per share. A PJM board-approved joint venture, cleared in February 2026, will develop approximately 300 miles of new 765-kV transmission lines across central Ohio, serving rapidly surging data center electricity demand. An increased quarterly dividend signals management's strong confidence in durable earnings growth ahead.

The Zacks Consensus Estimate for this Zacks Rank #2 company’s 2026 earnings has moved 0.4% north to $2.72 per share in the past 60 days. Its earnings surpassed the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 6.7%.