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4 Stocks Trading Near 52-Week High With Room to Rise 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 ANI Pharmaceuticals (ANIP - Free Report) , Heritage Insurance (HRTG - Free Report) , Avista (AVA - Free Report) and Exelon (EXC - 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 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 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 0.8 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 <=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 four stocks that made it through the screen:

ANI Pharmaceuticals represents a compelling investment opportunity in 2025 as it strategically strengthens its Rare Disease portfolio and enhances financial flexibility. The company recently boosted 2025 revenue guidance to $756-776 million with Rare Disease products representing nearly half of total revenues. 

Its lead asset, Cortrophin Gel, delivered record quarterly revenues of $59.4 million with impressive 42.3% year-over-year growth. The ILUVIEN/YUTIQ ophthalmology franchise shows significant expansion potential following the FDA approval for chronic NIU-PS and the elimination of a perpetual royalty obligation. With strong adjusted EBITDA growth of 66% to $50 million, robust commercial execution, and strategic investments in supply security, ANI is positioned for accelerated growth in high-value therapeutic areas while maintaining strong cash flow generation.

The Zacks Consensus Estimate for ANIP’s 2025 earnings has remained steady at $6.34 per share in the past 30 days. The company surpassed the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 17.32%.

Heritage Insurance’s growing commercial residential business, expanding E&S business and improving pricing are expected to deliver better margins and boost earnings. Rate adequacy, selective profit-oriented underwriting criteria and restricting new business in over-concentrated markets or products should drive profitability for Heritage Insurance. HRTG focuses on selective underwriting. There has been a decline in policy count, though average premiums per policy increased. However, HRTG expects the headwind from declining policies to begin to moderate over the next few quarters. 

The excess and supply (E&S) business is another growth lever for Heritage. HRTG stated that it will consider and evaluate growth opportunities in a greater number of states. Its reinsurance program shields Heritage Insurance from exposure to hurricanes and other severe weather events in the coastal area. The insurer expects a substantial reduction in the ceded premium ratio, given a combination of improvements in the reinsurance program from a cost and structure standpoint and growing gross premiums earned.

The Zacks Consensus Estimate for HRTG’s 2025 earnings has moved north by 8% to $2.43 per share in the past 30 days. The company surpassed the Zacks Consensus Estimate in three of the trailing four quarters while missing the same once, the average surprise being 328.63%.

Avista’s strategic capital expenditures help it improve its transmission and distribution and generation capacity. This should enhance its overall performance. Regulatory approvals for new electric rates help the company boost its top line. Given its growth opportunities, Avista makes for a solid investment option in the utility sector.

The company has been consistently increasing the value of its shareholders through dividends. It expects a dividend CAGR of 3.8% through 2025 (from 2021 baseline). Currently, Avista’s quarterly dividend is 49 cents per share. This represents an annualized dividend of $1.96 per share, up 3.2% from the previous level. The company expects a targeted annual dividend payout ratio of 65-75%. Its current dividend yield is 4.94%, better than the Zacks S&P 500 composite's average of 1.3%. The company expects to invest nearly $2.98 billion during 2025-2029 in infrastructure upgrades. Nearly 48% of the total investments during 2025-2027 are for transmission and distribution. Avista expects an annual rate base growth of 5-6% during 2025-2029, driven by its capital expenditures.

The Zacks Consensus Estimate for AVA’s 2025 earnings has moved north by 2% to $2.61 per share in the past 30 days. The company surpassed the Zacks Consensus Estimate twice in the trailing four quarters while missing the same twice, the average surprise being 31.26%.

Exelon’s investment will strengthen its transmission and distribution infrastructure and assist in providing reliable services to customers. Exelon's initiatives in grid modernization are going to improve the resilience of its operations and revenue decoupling mitigates the impact of load fluctuation. Stable cash flow allows the company to pay regular dividends. The development of data centers is going to increase demand. Our model projects revenues to increase year over year in the 2025-2027 period.

Exelon invests substantially in infrastructure projects and plans to invest nearly $38 billion during 2025-2028 in regulated utility operations. The new capital expenditure indicates a 10% increase from the prior plan and will be utilized to support customer needs and grid reliability. The company is set to invest $21.7 billion in electric distribution, $12.6 billion in electric transmission and $3.8 billion in gas delivery in the 2025-2028 period.

The Zacks Consensus Estimate for EXC’s 2025 earnings has moved north by a penny to $2.66 per share in the past 30 days. The company surpassed the Zacks Consensus Estimate in three of the trailing four quarters while missing the same once, the average surprise being 7.63%.

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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


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