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 may lose out on top gainers in an attempt to avoid the steep prices.

Stocks such as Cinemark (CNK Quick QuoteCNK - Free Report) , ConocoPhillips (COP Quick QuoteCOP - Free Report) , Pebblebrook Hotel Trust (PEB Quick QuotePEB - Free Report) and Chord Energy Corporation (CHRD Quick QuoteCHRD - 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 12 stocks that made it through the screen:

Cinemark’s near-term setup rests on a content-heavy calendar and a stronger balance sheet. The holiday slate runs from The Hunger Games: Sunrise on the Reaping on Nov. 20 to Dune: Part Three and Avengers: Doomsday on Dec. 18, then Jumanji: Open World on Dec. 25, supporting year-end attendance. Cash was $555.5 million as of Sept. 30, against $1,876.4 million of long-term debt, while 2026 capital spending of roughly $250 million targets new theaters, recliner remodels and laser projectors. Premium formats, including XD at 13% of 2025 global box office on 5% of screens, and a Movie Club with over 1.5 million members add resilience. The Dallas Cowboys partnership and $5 holiday Clubhouse screenings broaden engagement, though formal earnings guidance remains absent.

This stock has surged 42.6% over the past six months. It has a trailing four-quarter negative earnings surprise of 7.36%, on average. 

ConocoPhillips’ third-quarter production is guided in the range of 2.29–2.32 million barrels of oil equivalent per day, while the full-year guidance of 2.33–2.36 million remains unchanged. Execution on a targeted $1 billion reduction in 2026 capital and costs supports free cash flow, which management expects to increase by $7 billion by 2029. The $5 billion disposition target, met early, adds flexibility. Capital returns remain a priority, with 45% of operating cash flow earmarked for shareholders in 2026. The pending 42% Kirkuk interest in Iraq, expected to close by year-end, and 12 million tonnes per annum of LNG offtake broaden the portfolio. Still, commodity price swings and project timing remain key risks.

The stock has returned 17.1% in the past six months. It has a trailing four-quarter earnings surprise of 7.04%, on average.

Pebblebrook Hotel Trust’s raised 2026 outlook anchors the near-term case. Adjusted FFO is guided in the range of $1.88-$1.92 per share, with adjusted EBITDAre of $363.3–$367.3 million. Fourth-quarter adjusted FFO is guided in the range of 26 cents to 30 cents per share, supported by same-property RevPAR growth of 4.0%-6.0%. Its balance sheet strengthened and net debt-to-EBITDA declined to 5.1x. The $350 million convertible notes due December are expected to be funded by cash, free cash flow and term loan capacity, leaving no other maturities until 2028. Capital spending is guided to be in the range of $60–$70 million as redevelopment largely wraps up. The October sale of Hotel Zags for $10.0 million and preferred repurchases at a 23% discount show capital discipline, while stronger 2027 convention calendars in San Diego and Boston offer a tailwind.
    
The stock has returned 53.3% in the past six-month period. It delivered a trailing four-quarter earnings surprise of 20.72%, on average. 

Chord Energy is sharpening its focus on the Williston Basin through the $550 million sale of non-operated Marcellus assets to POSCO International, expected to close in the fourth quarter. Management expects the divestiture to lift oil weighting by roughly 4 to 5 percentage points, trim annual capital spending by about $25 million and keep net leverage declining. 

Its updated guidance will arrive with third-quarter results. Preliminary third-quarter volumes beat the high end of guidance across oil, gas and NGLs, while $804.7 million of cash supports buybacks, including $44.3 million repurchased so far in the fourth quarter. Michael Lou, a 17-year company veteran, became CEO on Oct. 19, signaling continuity. Lease operating expenses should rise modestly per barrel after the sale closes.

This stock has declined 3.6% in the past six months. It has a trailing four-quarter earnings surprise of 11.7%, on average.