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 completely 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 Smithfield Foods, Inc. (SFD Quick QuoteSFD - Free Report) , Chord Energy Corporation (CHRD Quick QuoteCHRD - Free Report) , Eni (E Quick QuoteE - Free Report) and Occidental Petroleum (OXY Quick QuoteOXY - 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 five stocks that made it through the screen:

Smithfield Foods’ full-year 2025 sales reached a record $15.5 billion, up 9.8%, while adjusted operating profit surged 30.5% to $1.34 billion — the second consecutive record year. Adjusted operating margin expanded to 8.6%, with Packaged Meats sustaining profitability above $1 billion for four straight years. In February 2026, Smithfield unveiled a $1.3 billion investment to build a highly automated processing facility in Sioux Falls, SD, targeting long-term efficiency gains. The pending Nathan's Famous acquisition, set to be closed in first-half 2026, deepens the branded portfolio and will be immediately EPS-accretive with approximately $9 million in annual synergies. A net debt-to-EBITDA of 0.3x and a 25% dividend increase to $1.25 per share reinforce strong financial discipline.

This stock has returned 15.8% in the past six months. It has a trailing four-quarter earnings surprise of 15.28%, on average. The Zacks Consensus Estimate for SFD’s fiscal 2026 earnings has moved north by 11.8% to $2.74 per share over the past 30 days.

Chord Energy Corporation entered 2026 on strong fundamental footing. Its February 2026 earnings release confirmed that 2025 free cash flow and volumes exceeded expectations, with CapEx more than $100 million below prior-year pro-forma levels. Efficiency initiatives generated approximately $160 million in incremental run-rate free cash flow. The completed XTO Williston Basin acquisition added 38 MMBoe of proved reserves and 90 low-breakeven drilling locations, expanding low-cost inventory. Year-end 2025 proved reserves were 917.5 MMBoe. For 2026, Chord targets 159 MBopd oil production, ~$2.3 billion adjusted EBITDA, and ~$700 million adjusted free cash flow at $1.4 billion capital expenditure. With ~40% of wells planned as 4-mile laterals and a $1.30 quarterly dividend declared in February 2026, the fundamental case is compelling.

This stock has returned 45.6% in the past six-month period. It has a trailing four-quarter earnings surprise of 5.44%, on average. The Zacks Consensus Estimate for CHRD’s 2026 earnings has moved north by 54.6% to $12.03 per share over the past 60 days.

Eni's robust fundamentals and disciplined capital strategy make a strong case for the stock in 2026. Its full-year results confirmed a healthier balance sheet, with gearing declining to 15% and net borrowings at €9.4 billion. At the March 2026 Capital Markets Update, Eni outlined gross capex of €7 billion while confirming production growth aligned with its long-range plan. Plenitude, Eni's renewable arm, targets €1.3 billion EBITDA in 2026, scaling to over €2.5 billion by 2030. The Plenitude-Acea Energia acquisition advances the European customer base to 11 million, ahead of plan. Eni raised its 2026 dividend to €1.10 per share, approximately 5% higher, and announced a €1.5 billion buyback, lifting the payout ratio significantly to 35–45% of cash flow from operations.

This stock has surged 59.1% in the past six-month period. It has a trailing four-quarter earnings surprise of 13.46%, on average. The Zacks Consensus Estimate for E’s 2026 earnings has moved north by 29.1% to $4.97 per share over the past 30 days.

Occidental Petroleum entered 2026 as a leaner, focused oil and gas company. The January 2026 OxyChem divestiture for $9.7 billion reduced principal debt by $5.8 billion to $15.0 billion. Occidental followed through in February 2026 with tender offers targeting $700 million in senior notes, funded by divestiture proceeds. Overwhelming bondholder demand prompted an upsize to $1.2 billion by early March 2026, fully subscribed ahead of the deadline. Operationally, fourth-quarter 2025 production of 1,481 Mboed surpassed guidance, while an organic reserves replacement ratio of 107% confirms resource depth. For 2026, Occidental targets ~1.45 million boe/d, cutting capex by $550 million and generating $500 million in cost savings. A quarterly dividend hike of over 8% to $0.26 per share caps a compelling reset.

This stock has gained 38.8% in the past six months. It has a trailing four-quarter earnings surprise of 38.74%, on average. The Zacks Consensus Estimate for OXY’s 2026 earnings has moved north by 208% to $2.71 per share over the past 60 days.