3 Stocks Trading Near 52-Week High With Room to Rise 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 Embecta Corp. EMBC, National Fuel Gas Company NFG and REV Group REVG 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 IndicatorMany 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 FiltersWe 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 >= .8This 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 > 0It ensures that the stock price has moved north over the past four weeks.% Change Price – 12 Weeks > 0This metric guarantees a continued upward price momentum for the stock over the past three months as well.Price/Sales <= XIndMedThe lower, the better.P/E using F(1) Estimate <= XIndMedThis 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) >= XIndMedThis 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 =1No 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 >= 8This parameter will help screen stocks that are trading at $8 or higher.Volume – 20 days (shares) >= 100000The inclusion of this metric ensures that there is a substantial volume of shares, so trading is easier.Here are three stocks of the five that made it through the screen:Embecta Corp. is a medical device company that provides various solutions to enhance the health and well-being of people with diabetes. Its products include pen needles, syringes, safety injection devices and digital applications to assist people in managing their diabetes.The company has received clearance from the FDA for its proprietary disposable patch pump for insulin delivery. EMBC is already working on a closed-loop version of the insulin delivery system, which will include an advanced insulin-dosing algorithm. This next-generation system is expected to offer even greater convenience and precision in insulin management, further solidifying Embecta's position as a leader in diabetes care innovation. Embecta’s focus on expanding its product offerings and improving the quality of life for people with diabetes aligns with its long-term vision of a life unlimited by diabetes. As the company continues to develop and refine its technology, it is well-positioned to make a lasting impact on the diabetes care market, particularly for the underserved T2D population.The Zacks Consensus Estimate for EMBC’s fiscal 2025 earnings has remained steady at $2.84 per share in the past 30 days. The company surpassed the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 39.51%.National Fuel Gas Company is an integrated energy company, which has natural gas assets located in the prolific Appalachian basin and oil-producing assets in California. The company operates through the following segments, namely Exploration and Production and Other, Pipeline and Storage and Gathering, and Utility and Energy Marketing.National Fuel Gas' systematic investments should strengthen its operations and reduce greenhouse gas emissions. Strong liquidity should allow it to meet debt obligations. Its steady process of replacing and modernizing the existing pipelines should further boost earnings. The company also acquired Shell’s assets, which should further boost its top-line performance. The Zacks Consensus Estimate for NFG’s fiscal 2025 earnings has moved north by 1.8% to $6.11 per share in the past 30 days. The company surpassed the Zacks Consensus Estimate thrice in the trailing four quarters while missing the same once, the average surprise being 9.49%.REV Group designs, manufactures and distributes specialty vehicles and related aftermarket parts and services. On Dec. 11, 2024, REV Group announced its fourth-quarter and full-year fiscal 2024 results. The company’s fiscal fourth-quarter net income came in at 80 cents per share, up from 50 cents recorded in the year-ago period. REV also increased its quarterly cash dividend by 20%Strong revenue growth in REV Group's Fire & Emergency segment, coupled with expanding margins, demonstrates operational improvement, particularly in its core business areas. The company's healthy order backlog combined with their strategic focus on higher-margin specialty vehicles positions them well for solid performance in 2025, while their disciplined approach to cost management and operational efficiency enhances potential profitability.The Zacks Consensus Estimate for REVG’s fiscal 2025 earnings has moved north by 7.4% to $2.32 per share in the past 30 days. The company surpassed the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 57.04%.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.Research Chief Names "Single Best Pick to Double"From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.This company targets millennial and Gen Z audiences, generating nearly $1 billion in revenue last quarter alone. A recent pullback makes now an ideal time to jump aboard. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.Free: See Our Top Stock And 4 Runners UpWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report National Fuel Gas Company (NFG): Free Stock Analysis Report REV Group, Inc. (REVG): Free Stock Analysis Report Embecta Corp. (EMBC): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks