4 Stocks Trading Near 52-Week High With More Upside Potential

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 absolutely baseless, not all stocks hitting a 52-week high are necessarily overpriced.

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

Stocks such as Federated Hermes FHI, Envista NVST, CommScope COMM and Flowserve FLS 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 is no tangible negative. 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: 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 >= 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 22 stocks that made it through the screen:

Federated Hermes is a global asset manager with $845.7 billion in AUM as of June 30, 2025. Its AUM balance continues to benefit from strategic deals and a focus on acquiring money market assets. The buyout of C.W. Henderson and Associates, Inc. in 2022 expanded its separately managed account business. With a diverse asset and product mix and inorganic growth efforts, the company holds significant potential in the long run. The company ended the first half of 2025 with a record AUM, driven by record money market assets and an increase in equity assets. Its inorganic growth efforts are expected to continue to drive the AUM balance in the upcoming period. 

The Zacks Consensus Estimate for FHI’s 2025 earnings has moved north by 1.8% to $4.45 per share in the past 30 days. The company surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 14.54%.

Envista is a global family of more than 30 dental brands, including Nobel Biocare, Ormco, DEXIS and Kerr, built through the acquisition and integration of over 25 leading dental businesses. Envista is making progress in its three core focus areas. The Spark business is consistently taking shares and expanding gross margins. Amid ongoing macro uncertainty, the company is driving strong contributions from EBS. New acquisitions continue to capture strong synergies. Furthermore, the company’s growing international presence is supported by its trusted brands, innovative product offerings and comprehensive customer service. A stable global dental market creates favorable long-term growth opportunity for the company. Solid financial stability also bodes well for the stock.

The Zacks Consensus Estimate for NVST’s 2025 earnings has moved north by 8.7% to $1.12 per share in the past 30 days. The company surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 16.5%.

CommScope Holding Company is a premier provider of infrastructure solutions, including wireless and fiber optic solutions, for the core, access and edge layers of communication networks. Strength in the cloud and data center market is driving growth in the CCS segment. High demand for DOCSIS 4.0 products is driving growth in the ANS segment. The company has inked a definitive agreement to divest its CCS segment. The divestiture will streamline the portfolio, reduce debt and deliver greater value to shareholders. The company is developing solutions designed to support wireline and wireless network convergence, which are essential for the success of 5G technology. 

The Zacks Consensus Estimate for COMM’s 2025 earnings has moved north by 47.7% to $1.30 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 98.3%.

Flowserve is gaining from strength across its segments. The Flowserve Pump Division unit is particularly strong, driven by solid momentum in the aftermarket business. The increase in bookings across general industries and oil & gas end markets is aiding the Flow Control Division’s performance. Strength across end markets, along with Flowserve's Diversify, Decarbonize and Digitize (3D) strategy, is driving its booking levels. The company expects significant chemical capacity additions in the Middle East and modest improvement in overall global chemical demand in the quarters ahead. Solid booking level in the power generation market is being driven by the growth in data center capacity and increasing Artificial Intelligence activity. 

The Zacks Consensus Estimate for FLS’ 2025 earnings has moved north by 3.4% to $3.31 per share in the past 30 days. The company surpassed the Zacks Consensus Estimate in two of the trailing four quarters while missing the same twice, the average surprise being 5.54%.

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.
    
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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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