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 Sanmina (SANM Quick QuoteSANM - Free Report) , Chord Energy Corporation (CHRD Quick QuoteCHRD - Free Report) , Marathon Petroleum (MPC Quick QuoteMPC - Free Report) and Cenovus Energy (CVE Quick QuoteCVE - 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:

Sanmina is well-positioned to deliver sustained earnings growth through fiscal 2026, supported by structural strengths and recent operational milestones. The company's second quarter, which ended March 28, 2026, reflected strong revenue of $4.01 billion, with core Sanmina growing 7.3% year over year, demonstrating broad-based demand health beyond its ZT Systems acquisition.

Non-GAAP operating margin expanded to 6.4%, while free cash flow reached $342 million for the quarter, signaling disciplined capital deployment. The balance sheet remained robust, with $1.58 billion in cash. On April 27, 2026, the board authorized a $600 million share repurchase program, reinforcing the capital return commitment. The Cloud and AI Infrastructure end-market continues to drive accelerated compute demand, underpinning management's confidence in full-year fiscal 2026 revenue guidance of $13.7-$14.3 billion.

This stock has returned 22.5% in the past six months. It has a trailing four-quarter earnings surprise of 13.85%, on average.

Chord Energy Corporation targets oil production of 157–161 MBopd, approximately $2.3 billion in adjusted EBITDA and $700 million in adjusted free cash flow in 2026. The XTO Williston Basin acquisition, completed in the fourth quarter of 2025, added 38 MMBoe to proved reserves totaling 917.5 MMBoe, with WTI breakevens in the low $40s. Approximately 80% of 2026 wells will be long laterals. Fiscal 2025 lease operating expenses were $9.73/Boe, below guidance, aided by AI-driven optimization across approximately 99% of rod-lift wells. A $1.30 per share base dividend was paid on March 27, 2026. With leverage near 0.6x, CHRD is positioned for sustained value creation.

This stock has returned 71.3% in the past six-month period. It delivered a trailing four-quarter earnings surprise of 5.44%, on average. 

Marathon Petroleum's investment case in 2026 is grounded in operational strength and structural cash flow advantage. Its refining system achieved 94% utilization and 105% margin capture in full-year 2025, generating $8.3 billion in operating cash flow. Midstream subsidiary MPLX's rising distributions are structurally positioned to more than fund MPC's 2026 dividend and $1.5 billion standalone capital budget, creating a self-funding return engine. Multiple high-return infrastructure projects, including the Blackcomb and Bay Runner pipelines and Harmon Creek III processing plant, are scheduled for 2026 commissioning, expanding midstream throughput and fee-based earnings visibility. On April 29, 2026, MPC declared a $1.00 per share quarterly dividend, underscoring its commitment to shareholder returns. With $4.4 billion remaining under buyback authorizations, capital return remains intact.

This stock has surged 33.4% in the past six-month period. It has a trailing four-quarter earnings surprise of 32.69%, on average. 

Cenovus Energy’s fourth-quarter 2025 upstream production reached a record 917,900 BOE/d, rising 5% year over year excluding the MEG acquisition, while downstream utilization was 98%. Adjusted funds flow for the full year rose to $8.9 billion and net earnings grew to $3.9 billion. The MEG acquisition, closed in November 2025, is set to generate $150 million in annual synergies through 2027, growing to over $400 million by 2028. In March 2026, Cenovus redeemed $300 million of preferred shares from existing cash. West White Rose, targeting first oil in the second quarter of 2026, will add 45,000 bbls/d net at peak.

This stock has gained 76.5% in the past six months. It has a trailing four-quarter earnings surprise of 51.16%, on average.