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4 Stocks Trading Near 52-Week High That Can Climb Further
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Stocks hitting their 52-week high and delivering consistent performance 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.
Moreover, 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.
In fact, investors might lose out on top gainers in an attempt to avoid the steep prices.
Stocks such as Wolverine World Wide (WWW - Free Report) , Norwegian Cruise Line (NCLH - Free Report) , Century Communities (CCS - Free Report) and The Bank of New York Mellon (BK - 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 further 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.
In fact, 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 encouraged 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 under-reaction 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 >= .8
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.
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 >= 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 four stocks of the 18 that made it through the screen:
Wolverine World Wide is engaged in the designing, manufacturing and distribution of a wide variety of casual as well as active apparel and footwear. The company also manufactures children’s footwear and specially designed boots and accessories for industrial purposes.
Wolverine is making significant strides in its transformation plan led by strong performances from Merrell and Saucony. The company has invested in brand marketing, strengthened its balance sheet and reduced debt and inventory levels. Wolverine achieved a record gross margin, reflecting successful supply chain and pricing strategies. Key product launches, such as Saucony's Ride and Guide 17 and Merrell's Moab Speed 2, are driving growth. The company is enhancing consumer engagement with innovative marketing campaigns and expanding its global presence, notably in Japan.
The Zacks Consensus Estimate for WWW’s 2024 earnings has moved north by 2.4% to 85 cents per share in the past 30 days. The company surpassed the Zacks Consensus Estimate once in the trailing four quarters while missing the same once and matching it twice, the average surprise being 7.5%.
Norwegian Cruise Line Holdings, a Bermuda Limited company, is a leading cruise line operator. It owns and operates three brands — Oceania Cruises, Regent Seven Seas Cruises and Norwegian Cruise Line.
NCLH is benefiting from strong demand, high pricing and increased booking volumes, leading to record advance ticket sales. Its focus on fleet expansion efforts and digital initiatives bodes well. These factors showcase that the company’s strategy is well-aligned with its growth goals and 2026 financial and sustainability targets. Given the substantial progress made so far and current demand expectations, the company raised its 2024 full-year guidance.
The Zacks Consensus Estimate for NCLH’s 2024 earnings has moved north by 8.3% to $1.56 per share in the past 30 days. The company surpassed the Zacks Consensus Estimate thrice in the trailing four quarters while missing the same, the average surprise being 5.67%.
Century Communities is a home building and construction company. Its activities comprise land acquisition, development and entitlements, and the acquisition, development, construction, marketing, and sale of various single-family detached and attached residential home projects.
The company’s initiative of offering affordable homes along with several incentive offerings, including lot premiums, interest rate buydowns and discounts on base home prices, is expected to be a tailwind. Also, its focus on building homes on a spec basis bodes well. This initiative of the company helps in direct cost control, sparks the availability of quick move-ins and assures buyers of financing certainty. Furthermore, despite the improving inventory of existing home sales, the company is likely to benefit from increasing new home contracts, thanks to its improved cycle times and increased level of home starts. The company’s focus on affordability, along with the reduced cycle times and cost-reduction initiatives, positions it well for the rest of 2024.
The Zacks Consensus Estimate for 2024 earnings has moved north by 0.8% to $10.72 per share in the past 30 days. CCS surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 35.57%.
The Bank of New York Mellon operates in 35 countries and provides various products and services to individuals and institutions. Its global client base consists of financial institutions, corporations, government agencies, endowments and foundations, and high-net-worth individuals.
BNY Mellon’s growth initiatives are impressive. The company has been trying to launch several services, digitize operations and make strategic buyouts. Also, it has been strengthening its foothold in foreign markets. BK’s international revenues are expected to continue improving as the demand for personalized services rises globally. Its deal to divest BNY Trust Company of Canada to Computershare aligns with its strategic focus to gain a foothold in foreign markets outside Canada.
The Zacks Consensus Estimate for 2024 earnings has moved north by 0.5% to $5.63 per share in the past 30 days. BK surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 9.92%.
Get the rest of the stocks on the list and start putting this and other ideas to the test. It can all be done with the Research Wizard stock picking and back testing software.
The Research Wizard is a great place to begin. It's easy to use. Everything is in plain language. And it's very intuitive. Start your trial to the Research Wizard today. And the next time you read an economic report, open up the Research Wizard, plug your finds in, and see what gems come out.
Disclosure: Officers, directors and/or employees of Zacks Investment Research may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material. An affiliated investment advisory firm may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material.
Image: Bigstock
4 Stocks Trading Near 52-Week High That Can Climb Further
Stocks hitting their 52-week high and delivering consistent performance 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.
Moreover, 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.
In fact, investors might lose out on top gainers in an attempt to avoid the steep prices.
Stocks such as Wolverine World Wide (WWW - Free Report) , Norwegian Cruise Line (NCLH - Free Report) , Century Communities (CCS - Free Report) and The Bank of New York Mellon (BK - 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 further 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.
In fact, 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 encouraged 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 under-reaction 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 >= .8
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.
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 >= 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 four stocks of the 18 that made it through the screen:
Wolverine World Wide is engaged in the designing, manufacturing and distribution of a wide variety of casual as well as active apparel and footwear. The company also manufactures children’s footwear and specially designed boots and accessories for industrial purposes.
Wolverine is making significant strides in its transformation plan led by strong performances from Merrell and Saucony. The company has invested in brand marketing, strengthened its balance sheet and reduced debt and inventory levels. Wolverine achieved a record gross margin, reflecting successful supply chain and pricing strategies. Key product launches, such as Saucony's Ride and Guide 17 and Merrell's Moab Speed 2, are driving growth. The company is enhancing consumer engagement with innovative marketing campaigns and expanding its global presence, notably in Japan.
The Zacks Consensus Estimate for WWW’s 2024 earnings has moved north by 2.4% to 85 cents per share in the past 30 days. The company surpassed the Zacks Consensus Estimate once in the trailing four quarters while missing the same once and matching it twice, the average surprise being 7.5%.
Norwegian Cruise Line Holdings, a Bermuda Limited company, is a leading cruise line operator. It owns and operates three brands — Oceania Cruises, Regent Seven Seas Cruises and Norwegian Cruise Line.
NCLH is benefiting from strong demand, high pricing and increased booking volumes, leading to record advance ticket sales. Its focus on fleet expansion efforts and digital initiatives bodes well. These factors showcase that the company’s strategy is well-aligned with its growth goals and 2026 financial and sustainability targets. Given the substantial progress made so far and current demand expectations, the company raised its 2024 full-year guidance.
The Zacks Consensus Estimate for NCLH’s 2024 earnings has moved north by 8.3% to $1.56 per share in the past 30 days. The company surpassed the Zacks Consensus Estimate thrice in the trailing four quarters while missing the same, the average surprise being 5.67%.
Century Communities is a home building and construction company. Its activities comprise land acquisition, development and entitlements, and the acquisition, development, construction, marketing, and sale of various single-family detached and attached residential home projects.
The company’s initiative of offering affordable homes along with several incentive offerings, including lot premiums, interest rate buydowns and discounts on base home prices, is expected to be a tailwind. Also, its focus on building homes on a spec basis bodes well. This initiative of the company helps in direct cost control, sparks the availability of quick move-ins and assures buyers of financing certainty. Furthermore, despite the improving inventory of existing home sales, the company is likely to benefit from increasing new home contracts, thanks to its improved cycle times and increased level of home starts. The company’s focus on affordability, along with the reduced cycle times and cost-reduction initiatives, positions it well for the rest of 2024.
The Zacks Consensus Estimate for 2024 earnings has moved north by 0.8% to $10.72 per share in the past 30 days. CCS surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 35.57%.
The Bank of New York Mellon operates in 35 countries and provides various products and services to individuals and institutions. Its global client base consists of financial institutions, corporations, government agencies, endowments and foundations, and high-net-worth individuals.
BNY Mellon’s growth initiatives are impressive. The company has been trying to launch several services, digitize operations and make strategic buyouts. Also, it has been strengthening its foothold in foreign markets. BK’s international revenues are expected to continue improving as the demand for personalized services rises globally. Its deal to divest BNY Trust Company of Canada to Computershare aligns with its strategic focus to gain a foothold in foreign markets outside Canada.
The Zacks Consensus Estimate for 2024 earnings has moved north by 0.5% to $5.63 per share in the past 30 days. BK surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 9.92%.
Get the rest of the stocks on the list and start putting this and other ideas to the test. It can all be done with the Research Wizard stock picking and back testing software.
The Research Wizard is a great place to begin. It's easy to use. Everything is in plain language. And it's very intuitive. Start your trial to the Research Wizard today. And the next time you read an economic report, open up the Research Wizard, plug your finds in, and see what gems come out.
Click here to sign up for a free trial to the Research Wizard today.
Disclosure: Officers, directors and/or employees of Zacks Investment Research may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material. An affiliated investment advisory firm may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material.
Disclosure: Performance information for Zacks’ portfolios and strategies are available at: https://www.zacks.com/performance