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 Bandwidth (BAND Quick QuoteBAND - Free Report) , Chord Energy Corporation (CHRD Quick QuoteCHRD - Free Report) , Arrow Electronics (ARW Quick QuoteARW - Free Report) and Cimpress (CMPR Quick QuoteCMPR - 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 24 stocks that made it through the screen:

Bandwidth presents a compelling near-term investment opportunity, anchored by accelerating fundamentals. It posted first-quarter 2026 record revenues of $209 million, up 20% year over year. Adjusted EBITDA was $26 million, up 17%. Both revenues and EBITDA exceeded the guidance. The company consequently raised its full-year 2026 revenue outlook to $880–$900 million, with adjusted EBITDA of $119–$125 million. AI-driven platform adoption is gaining real traction, most notably with Salesforce selecting Bandwidth to power voice and messaging for its Agentforce Contact Center. Multiple million-dollar-plus enterprise wins in financial services reinforce demand. In April 2026, Bandwidth was named a leader in the inaugural IDC MarketScape for Communications Engagement Platforms. Disciplined balance-sheet management, including convertible debt retirement and share repurchases, adds further conviction.

The stock has returned 381.6% in the past six months. It has a trailing four-quarter earnings surprise of 8.06%, on average.

Chord Energy presents a compelling near-term investment case grounded in solid operational fundamentals. Its first-quarter 2026 oil volumes of 158.0 MBopd surpassed the high end of guidance, prompting management to raise 2026 oil volume expectation by 2 MBopd to 161 MBopd with capital expenditure held flat at a $1.4 billion midpoint. The company's inaugural four-mile DSU lateral development — the Toonie five-well pad — was completed on time and on budget, with ~40% of 2026 Turned-In-Lines (TILs) planned as four-mile wells. Production enhancement initiatives, including AI-driven artificial lift optimization and dual-fuel frac fleets, are expected to grow volumes with minimal cost increases. The 2026 guidance targets approximately $3.1 billion in adjusted EBITDA and $1.4 billion in adjusted free cash flow, backed by $2.2 billion in liquidity.

This stock has returned 42.1% in the past six-month period. It delivered a trailing four-quarter earnings surprise of 11.41%, on average. 

Arrow Electronics appears well-positioned for continued near-term momentum following a strong first-quarter 2026. Consolidated sales of $9.5 billion rose 39% year over year and surpassed the high end of its own guidance. Both Global Components ($6.64B, +39%) and Enterprise Computing Solutions ($2.83B, +39%) delivered broad-based growth across Americas, EMEA, and Asia-Pacific geographies. The company generated $700 million in operating cash flow during the quarter. 

Management's second-quarter 2026 guidance projects consolidated sales of $9.15B–$9.75B, with continued EPS expansion anticipated. A freshly authorized $1 billion share repurchase program, effective May 12, 2026, signals the board’s confidence in ARW's financial strength. The May integration of Chip One Stop's e-commerce operations into arrow.com deepens Arrow's omnichannel capabilities in Japan, broadening its go-to-market reach.

This stock has surged 94.5% in the past six-month period. It has a trailing four-quarter earnings surprise of 33.71%, on average. 

Cimpress is gaining fundamental ground across its key business segments. In third-quarter fiscal 2026, reported in April, it delivered 12% revenue growth and adjusted EBITDA of $100.5 million. This was the first time this metric topped $100 million in a third quarter and was up 11% year over year. Management raised full-year fiscal 2026 guidance for the second time, now targeting 9%–10% revenue growth and at least $465 million in adjusted EBITDA. VistaPrint's variable gross profit per customer grew 13% in the fiscal third quarter, its 13th consecutive quarter of gains, driven by elevated product adoption. The May 2026 acquisition of SAXOPRINT and viaprinto — generating €89.6 million in 2025 revenues — is projected to deliver returns well above 20%. Management targets at least $600 million in fiscal 2028 adjusted EBITDA with net leverage below 2.0x.

This stock has gained 34.6% in the past six months. It has a trailing four-quarter earnings surprise of 21.52%, on average.