Yahoo Finance 3 Stocks Trading Near 52-Week High That Can Climb 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 Pactiv Evergreen PTVE, Pilgrim's Pride Corporation PPC and Criteo CRTO 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 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.
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 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 as well as sales, ensuring the continuation of their rally for some time.
Current Price/52 Week High >= .8
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 0.11 implies that 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 >= 8
This parameter will help screen stocks that are trading at $8 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 the three stocks of the six that made it through the screen:
Pactiv Evergreen is a North America-based manufacturer and distributor of fresh food and beverage packaging. Its products are used by packers, processors, supermarkets, restaurants, institutions and foodservice outlets. Pactiv Evergreen's products include food containers, plates, bowls, cups, lids, wraps, cutlery, meat and poultry trays, egg cartons and reclosable beverage cartons.
The company is benefiting from the strong performance of the Foodservice segment, beverage merchandising restructuring and product innovations. Also, the emphasis on portfolio optimizations by exiting non-core businesses and reallocating resources to core markets is likely to aid the company’s performance in the near term. The successful implementation of the Pactiv Evergreen Production System and the optimization of its manufacturing and distribution network are expected to drive improvements in near-term margins and free cash flow.
The Zacks Consensus Estimate for PTVE’s 2024 earnings has remained steady at $1.13 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 96.09%.
Pilgrim’s Pride is engaged in the processing, production, marketing and distribution of frozen, fresh as well as value-added chicken products. The company offers its services in the United States, Mexico, France, the Netherlands, Puerto Rico and Mexico through a number of distributors, retailers and food service operators.
The company is witnessing growth in the Retail and Foodservice business in the Prepared Foods segment along with enhanced operations in Big Bird. Focus on key customers in the foodservice sector has yielded a substantial pipeline of promotional initiatives with leading retailers and food service providers. Pilgrim's Pride is on track with its strategic growth efforts, such as facility expansions and technology integration, which are likely to boost operational efficiency. Apart from this, Pilgrim's Pride has been steadily augmenting marketing support for its brands as they expand and enter new regions.
The Zacks Consensus Estimate for PPC’s 2024 earnings has moved 1.37% north to $3.01 per share in the past 30 days. The company surpassed the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 252.84%.
Criteo SA is a global technology company that specializes in performance display advertising. The company offers clients a range of solutions such as click-per-cost, online banner displays, user optimization, data security and search management tools to control campaign costs. It serves companies in the online retail, classifieds and travel segments.
Its unified, AI-driven platform directly connects advertisers with retailers and publishers to drive commerce on retailer sites and on the open Internet. The company’s strategy is to harness AI to expand its reach across audiences, as cookies are gradually frowned upon and outlawed across the world. It, therefore, seeks to expand its ecosystem across advertisers, retailers and third-party platforms, using the commerce dataset to feed its AI models. In 2024, it will make use of the latest AI technologies, including generative AI, to improve performance, enhance user experience and optimize its service delivery process to further drive its strategy.
The Zacks Consensus Estimate for CRTO’s 2024 earnings has remained steady at $3.54 per share in the past 30 days. The company surpassed the Zacks Consensus Estimate in three of the trailing four quarters while matching the same once, the average surprise being 29.82%.
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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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Pilgrim's Pride Corporation (PPC) : Free Stock Analysis Report
Criteo S.A. (CRTO) : Free Stock Analysis Report
Pactiv Evergreen Inc. (PTVE) : Free Stock Analysis Report
