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Chicago, IL – June 16, 2025 – Stocks in this week’s article are Popular BPOP, Affiliated Managers Group AMG, Astronics ATRO and Phibro Animal Health PAHC.
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 Popular, Affiliated Managers Group, Astronics and Phibro Animal Health 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."
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.
Here are our four picks out of the 13 stocks that made it through the screen:
Popular is a full-service financial services provider with operations in Puerto Rico, the U.S. mainland and British Virgin Islands.
Popular has demonstrated healthy organic growth over the past few years, supported by a rising trend in loan and deposit volumes. From 2020 to 2024, the company achieved a four-year compound annual growth rate (CAGR) of 5.6% in revenues. This was mirrored by a 6.8% CAGR in net loans and a 3.4% increase in total deposits during the same timeframe. In the first quarter of 2025, the uptrend continued for revenues, loans and deposits. These trends reflect the strength of Popular's banking operations in its core geographies and underscore its well-established retail and commercial banking franchise.
The company's balance sheet remains healthy, supported by a liquidity position of $6.6 billion as of March 2025. Total debt is limited to $1.4 billion, suggesting low refinancing risk even in a challenging macro environment.
The Zacks Consensus Estimate for BPOP's 2025 earnings has moved north by 1.2% to $10.54 per share in the past 30 days. It has a trailing four-quarter earnings surprise of 11.82%, on average.
Affiliated Managers Group is a global asset manager with investments in high-quality, independent partner-owned firms or affiliates.
The company's first-quarter 2025 results reflected a rise in assets under management (AUM) balance. Diverse product offerings, robust AUM balance and global distribution capability are expected to drive the company's top line in the near term. We project total revenues and total AUM to witness a CAGR of 3.4% and 4.6%, respectively, by 2027.
As of March 31, 2025, Alternatives constituted 41.4% of total AUM and generated almost 50% of the company's earnings. Over time, earnings contribution from alternatives will keep growing as the company pivots the business mix toward secular growth areas and strong investor preference. Our estimates for alternative strategies AUM suggest a CAGR of 19.4% by 2027. To execute its expansion plan, the company has sufficient liquidity available.
The Zacks Consensus Estimate for AMG's 2025 earnings has moved north by 1.9% to $23.01 per share in the past 30 days. It has a trailing four-quarter earnings surprise of 2.99%, on average.
Astronics is a manufacturer of specialized lighting and electronics for the cockpit, cabin and exteriors of military, commercial transport and private business jet aircraft.
Higher commercial transport sales, primarily related to increased demand from 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.
The Zacks Consensus Estimate for ATRO's 2025 earnings has remained steady at $1.50 per share in the past 30 days. It has a trailing four-quarter earnings surprise of 55.64%, on average.
Phibro Animal Health is a leading global diversified animal health and mineral nutrition company. The company provides a broad range of products for food animals, including poultry, swine, beef, dairy cattle and aquaculture.
Phibro's Medicated Feed Additives ("MFA") offerings hold the third-largest share in the animal health market. These concentrated medicated products, sold through its MFAs and other segments, are seeing strong uptake in international regions. Additionally, the company offers processing aids used in the ethanol fermentation industry, which also contribute to growth.
Phibro's leading MFA product franchise, Stafac/V-Max/Eskalin, is approved in more than 30 countries for use in poultry, swine, beef and dairy cattle and is regarded as one of the leading MFA products for production animals. Innovation also remains a strong focus area, leading to the development of new antigens and vaccines, such as the inactivated subunit Infectious Bursal Disease Virus and Egg Drop Syndrome vaccines. On top of that, the company heavily invests in expanding the vaccine manufacturing capacity at several locations, such as in Sligo, Ireland and Guarulhos, Brazil.
The Zacks Consensus Estimate for PAHC's fiscal 2025 earnings has moved north by 1.5% to $2.04 per share in the past 30 days. It has a trailing four-quarter earnings surprise of 30.62%, on average.
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For the rest of this Screen of the Week article please visit Zacks.com at: https://www.zacks.com/stock/news/2498399/4-stocks-trading-near-52-week-high-with-more-upside-potential
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.
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