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 Triumph Group TGI, Heritage Insurance HRTG, Astronics ATRO and Deutsche Bank DB 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 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, 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 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 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 eight stocks that made it through the screen:

Triumph Group offers a variety of products and services to the aerospace industry. Triumph is capable of producing a wide range of aircraft parts, including hydraulic, mechanical and electromechanical control systems, aircraft and engine accessories, structural components, auxiliary power units and avionics and aircraft instruments. 

Triumph Group benefits from a steady flow of orders from commercial airplane producers and various military organizations globally. The increasing global air traffic and strong demand trends in the defense sector have led to robust bookings for the company, resulting in a solid backlog worth $1.87 billion as of 2024-end. In January, the company revealed that its Actuation Products and Services business delivered more than $28 million worth of aftermarket shipments, year to date, for fiscal 2025.

TGI’s times interest earned ratio (TIE) at the end of the third quarter of fiscal 2025 was 1.2. A TIE ratio of more than 1 indicates that the company will be able to meet its interest payment obligations in the near term without any problems.

The Zacks Consensus Estimate for TGI’s fiscal 2025 earnings has remained steady at 68 cents 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 159.38%.

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 has 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 remained steady at $2.43 per share in the past 30 days. The company surpassed the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 363.17%.

Astronics Corporation is a manufacturer of specialized lighting and electronics for the cockpit, cabin and exteriors of military, commercial transport and private business jet aircraft. A major lighting and electronics supplier to the aircraft industry, its strategy is to expand from a components and subsystems supplier to an aircraft lighting systems integrator, increasing the value and content it provides to various aircraft platforms. 

Higher commercial transport sales, primarily related to increased demand by the airlines for cabin power and in-flight entertainment as well as connectivity products, backed by growing global commercial air traffic, are expected to bolster ATRO’s Aerospace business segment’s sales.  Higher sales from military aircraft markets, backed by enhanced geopolitical tensions worldwide, are likely to aid this unit’s sales growth in the near term. Expanding commercial air traffic worldwide remains a major growth catalyst for ATRO. 

The company also enjoys a solid presence in the defense industry, which provides its portfolio with a diversified cushion against any crisis. Evidently, ATRO made good progress last year in its contract for the U.S. Army Future Long Range Assault Aircraft (“FLRAA”) program. With prototypes for this program expected to fly in 2026, the development stage of FLRAA is projected to generate $60-$65 million over the next couple of years for ATRO, which might have partially aided its first-quarter 2025 performance.

The Zacks Consensus Estimate for ATRO’s 2025 earnings has moved south by 12.4% to $1.13 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 55.64%.

Deutsche Bank Aktiengesellschaft, also called Deutsche Bank AG, is the largest bank in Germany and one of the largest financial institutions in the world, as measured by total assets. It offers a wide variety of investment, financial and related products and services.

DB benefits from a well-diversified deposit base across various client segments and regions. This will likely support the balance sheet and improve its funding base. The company’s shifting focus from investment banking to more stable and capital-light businesses has started bearing fruit and driving revenue growth. 

Deutsche Bank is focused on strengthening its capital position. As of March 31, 2025, the Common Equity Tier 1 (CET 1) ratio was 13.8%, which increased from 13.4% in the year-ago quarter. Risk-weighted asset (RWA) reductions and strong organic capital generation enabled the bank to see improvement in the CET1 ratio. In the first quarter of 2025, the bank achieved cumulative RWA-equivalent reductions of €28 billion, nearing its 2025-end target of €25-€30 billion. Management anticipates further RWA reductions in the upcoming period through securitizations and continued improvements in data and processes.

The Zacks Consensus Estimate for DB’s 2025 earnings has moved north by 4.2% to $3.20 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 negative surprise being 66.85%.

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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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