4 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 Enersys ENS, DaVita DVA, REV Group REVG and Plains All American Pipeline PAA 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 four stocks of the 18 that made it through the screen:Enersys engages in manufacturing, marketing and distribution of various industrial batteries. Additionally, the company develops battery chargers and accessories, power equipment and outdoor cabinet enclosures. This apart, it provides support services for clients.EnerSys is set to benefit from its solid product offerings, a firm focus on product innovation and strengthening demand. Global megatrends, including 5G expansion, electrification, automation and decarbonization, are aiding the company. Increased sales of maintenance-free thin plate pure lead and lithium products bode well for the Motive Power segment. The Bren-Tronics buyout boosted its lithium product offerings and expanded the company’s presence in the military and defense end market. The Zacks Consensus Estimate for ENS’ fiscal 2025 earnings has moved north by 2.6% to $9.57 per share in the past 30 days. The company surpassed the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 1.57%.DaVita is a leading provider of dialysis services in the United States to patients suffering from chronic kidney failure, also known as end-stage renal disease (ESRD). Its services include outpatient dialysis services, hospital inpatient dialysis services and ancillary services such as ESRD laboratory services and disease management services.DaVita has been expanding its global presence via its Integrated Kidney Care (IKC) business. It has been opening and acquiring several dialysis centers both within the United States and overseas, which is promising. DaVita’s four separate purchase agreements with Fresenius Medical Care look promising. A strong solvency position is another positive. DaVita is experiencing significant growth driven by its patient-centric care approach, leveraging the company’s kidney care services platform to offer a wide range of treatment models and modalities. The increasing prevalence of value-based partnerships in kidney health enables nephrologists, physicians and transplant programs to collaborate more effectively, enhancing the understanding of individual patient needs and facilitating improved care coordination and early interventions.The Zacks Consensus Estimate for DVA’s 2025 earnings has remained steady at $11.24 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 10.59%.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 its strategic focus on higher-margin specialty vehicles, positions it well for solid performance in 2025. Its disciplined approach to cost management and operational efficiency enhances its potential to achieve profits.The Zacks Consensus Estimate for REVG’s fiscal 2025 earnings has remained steady at $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%.Plains All American Pipeline, a master limited partnership (MLP), is involved in the transportation, storage, terminalling and marketing of crude oil, natural gas, natural gas liquids and refined products in the United States and Canada. Plains All American Pipelines’ widespread Permian Basin operations should allow it to capture the increasing Permian production volumes. The firm's cost-saving initiatives, JV and asset divestitures are expected to boost operations. Its expansion of existing pipelines and development of new pipeline projects in key production regions of the United States should drive its operations. The firm has enough liquidity to meet its near-term debt obligations. The Zacks Consensus Estimate for 2025 earnings has moved north by 5.8% to $1.47 per share in the past 30 days. The company surpassed the Zacks Consensus Estimate in three of the trailing four quarters while missing once, the average surprise being 7.24%.Get the remaining 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/performanceZacks' Research Chief Names "Stock Most Likely to Double"Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.This top pick is among the most innovative financial firms. With a fast-growing customer base (already 50+ million) and a diverse set of cutting edge solutions, this stock is poised for big gains. 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 Plains All American Pipeline, L.P. (PAA): Free Stock Analysis Report DaVita Inc. (DVA): Free Stock Analysis Report Enersys (ENS): Free Stock Analysis Report REV Group, Inc. (REVG): 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