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 Phibro Animal Health PAHC, Astronics ATRO, CommScope COMM and Heritage Insurance HRTG 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 are no tangible negatives. 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: This 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 15 stocks that made it through the screen:

Phibro is benefiting from strong momentum in its Animal Health business. Key products, including MFAs (medicated feed additives) and nutritional specialty products, facilitate enhanced animal nutrition, while Phibro’s nutritional offerings, such as OmniGen-AF and Animate, continue to gain traction in the global dairy industry. The acquisition of Zoetis’ MFA portfolio and certain water-soluble products added more than 37 established product lines sold across 80 countries, along with six manufacturing sites in the United States, Italy and China. In addition, Phibro is heavily investing in expanding vaccine manufacturing capacity at several locations. It recently began operations at a new vaccine production facility in Guarulhos, Brazil, that manufactures and markets autogenous vaccines against animal diseases for swine, poultry and aquaculture. Moreover, the company has been experiencing recovery within the Mineral Nutrition and Performance Products businesses. 

The Zacks Consensus Estimate for PAHC’s fiscal 2026 earnings has moved north by 9.1% to $2.76 per share in the past 30 days. The company’s earnings surpassed the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 20.77%.

Astronics has been gaining momentum as global defense and commercial aerospace activity continues to expand. Higher commercial transport sales, backed by increased demand for cabin power and in-flight entertainment, as well as connectivity products from the airlines, as a result of rapidly growing global commercial air traffic, are likely to bolster ATRO’s Aerospace business segment’s sales in the near term. 

The company recently acquired Bühler Motor Aviation, a German aircraft seat actuation specialist. The deal enhances Astronics' engineering and product portfolio with $22 million in anticipated annual revenues next year, strengthening its commitment to provide best-in-class motion control for commercial aerospace industry players. Looking ahead, as airlines expand their fleets and enhance passenger experiences in response to the rapidly growing air travel demand worldwide, there is heightened demand for advanced cabin power systems and in-flight entertainment and connectivity solutions.

The Zacks Consensus Estimate for ATRO’s 2025 earnings has moved north by 7.9% to $1.78 per share in the past 30 days. Its earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 59.1%.

CommScope is developing solutions designed to support wireline and wireless network convergence, which are essential for the success of 5G technology. CommScope has an established global manufacturing and distribution footprint with strategically located manufacturing hubs that optimize product delivery timelines. The company recently announced the worldwide availability of SYSTIMAX Constellation edge-based power and connectivity platform. 

The solution effectively facilitates the deployment of 10G or higher speed fault-managed power networks with reduced cost, space and labor requirements. COMM also joined forces with Nokia to combine its FLX ODN non-hardened connectorized terminals with Nokia’s Broadband Easy digital automation platform to streamline the fiber deployment process in the Asia Pacific region. It is also collaborating with Comcast to roll out DOCSIS 4.0 amplifiers. CommScope’s growing partner base and strategic collaboration with industry leaders are driving innovation and boosting commercial prospects.

The Zacks Consensus Estimate for COMM’s 2025 earnings has moved north by 27.1% to $1.64 per share in the past 30 days. The company surpassed the Zacks Consensus Estimate for earnings in all the trailing four quarters, the average surprise being 143.98%.

Heritage Insurance Holdings remains focused on optimizing its portfolio of over $1 billion in gross premiums written toward products and geographies that maximize long-term returns to shareholders, while mitigating risk from a single or series of catastrophic weather events. This super-regional U.S. property and casualty insurance holding company thus depends on prudent underwriting execution, business diversification, rate adequacy initiatives implemented over the past three years, a robust reinsurance program and efficient management of losses and loss adjustment expenses (LAE). Heritage continues to invest strategically in InsurTech and advanced analytics to manage exposures effectively, supporting prudent loss management, earnings consistency and book value growth. Additionally, its strong partnerships with independent agencies and auto insurers enhance distribution reach and business diversification through bundled product offerings.

The Zacks Consensus Estimate for HRTG’s 2025 earnings has moved north by 25.4% to $5.14 per share in the past 30 days. Its earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 100.05%.

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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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