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 Murphy USA (MUSA Quick QuoteMUSA - Free Report) , DaVita (DVA Quick QuoteDVA - Free Report) , Hewlett Packard (HPE Quick QuoteHPE - Free Report) and Vishay Intertechnology (VSH Quick QuoteVSH - 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 22 stocks, each carrying a Zacks Rank #1, that made it through the screen:

Murphy USA's recent company disclosures point to a fuel-and-convenience retailer gaining steady momentum. April's first-quarter results showed fuel contribution strengthening to 35 cents per gallon and merchandise contribution dollars rising 7.3%. Management reaffirmed plans to open 45 to 55 new stores in 2026, with six already in service and 18 more under construction. In May, the board lifted the quarterly dividend to 64 cents per share, a 28% increase from a year earlier, and the company priced $500 million of senior notes carrying investment-grade ratings to refinance outstanding 2027 debt, extending maturities to 2034. That increased dividend was paid to shareholders on June 1, underscoring a disciplined, shareholder-friendly capital framework alongside continued investment in store growth and ongoing reinvestment programs.

The Zacks Consensus Estimate for the company’s 2026 earnings has moved 26.6% north to $32.32 per share in the past 60 days. MUSA surpassed the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 16.56%.

DaVita is set to enter the second half of 2026 on an encouraging footing. Management raised full-year guidance, lifting expected adjusted operating income to $2.15–$2.25 billion and adjusted EPS to $14.1–$15.2, alongside a $1–$1.25 billion free cash flow target. First-quarter revenues reached $3.42 billion, with U.S. dialysis treatment volumes and per-treatment reimbursement both improving year over year. The company served roughly 296,300 patients across 3,262 centers worldwide as of March 31, 2026, reflecting steady international expansion. Capital discipline remains a tailwind: DaVita repurchased 3 million shares in the first quarter, followed by another 2.0 million shares through early May, signaling continued confidence from leadership. With raised guidance, disciplined execution, and ongoing investment in integrated kidney care, DaVita looks well-positioned for steady near-term progress.

The Zacks Consensus Estimate for the company’s 2026 earnings has moved 6.4% north to $15.07 per share in the past 60 days. DVA’s earnings surpassed the Zacks Consensus Estimate thrice in the trailing four quarters while missing the same once, the average surprise being 2.4%.

Hewlett Packard is gaining fundamental ground across its key business segments. Its April announcement expanded the ProLiant edge portfolio for AI and mission-critical workloads, broadening addressable use cases. By May, the company completed its H3C divestiture, receiving roughly $1.36 billion in proceeds and strengthening balance-sheet flexibility. Its second-quarter results in June showed record revenues, expanding margins and free cash flow well ahead of plan, prompting management to raise full-year revenues, EPS, and free-cash-flow guidance, alongside a new fiscal 2027 growth framework. Networking revenues surged on Juniper integration, while Cloud & AI margins improved meaningfully. With a steady dividend, disciplined cost execution and AI-networking momentum highlighted at Discover 2026, HPE's fundamentals point to a constructive near-term trajectory.

The Zacks Consensus Estimate for the company’s fiscal 2026 earnings has moved 41.5% north to $3.41 per share in the past 60 days. HPE surpassed the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 15.97%.

Vishay Intertechnology enters the back half of 2026 with genuine operational momentum. First-quarter revenues reached $839.2 million with gross margin expanding to 21.0%. A 1.34 book-to-bill ratio—1.47 for semiconductors—signals demand outpacing shipments. Management guided second-quarter revenues to $875–905 million with gross margin near 22%, implying continued sequential improvement as the "Vishay 3.0" capacity investments mature. Its board reaffirmed a 10-cent quarterly dividend, which underscores balance-sheet discipline. Product momentum remains robust. April through June brought new FRED Pt rectifiers, automotive-grade optocouplers, high-current inductors, and a 200 A power module targeting EVs, solar inverters, and aerospace applications, which broadened Vishay's addressable end-markets. With a backlog of 5.7 months and rising lead-time competitiveness, its fundamentals point toward a constructive near-term setup.

The Zacks Consensus Estimate for the company’s 2026 earnings has increased by 47.1% to 75 cents per share in the past 60 days. VSH’s earnings surpassed the Zacks Consensus Estimate twice in the trailing four quarters, while missing the same twice, the average negative surprise being 108.33%.