Zacks.com Featured Highlights Include: Helen Of Troy, Penn National Gaming, Arcos Dorados, Insight Enterprises And Bristol-Myers Squibb
Zacks Investment Research | Jan 07, 2020 11:19PM ET
For Immediate Release
Chicago, IL – January 8, 2020 - Stocks in this week’s article are Helen of Troy Ltd. (NASDAQ:HELE) , Penn National Gaming, Inc. (NASDAQ:PENN) , Arcos Dorados Holdings Inc. (NYSE:ARCO) , Insight Enterprises Inc. (NASDAQ:NSIT) and Bristol-Myers Squibb (NYSE:BMY) .
5 High-Flying Stocks Near 52-Week Highs That Can Scale Higher
Investors generally use 52-week high as an indicator to pick stocks. This is because stocks near that level are perceived to be winners.
However, considering 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 of stocks that are near their 52-week high mark.
A good stock can maintain the momentum and keep scaling new highs. So, more information on a stock is necessary to understand whether there is scope for further upside.
Here we discuss a strategy to find the right stocks, which borrows from the basics of momentum investing, this technique bets on “buy high, sell higher.”
52-Week High: A Good Indicator
Many a time, stocks hitting 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 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.
For the rest of this Screen of the Week article please visit Zacks.com at:Zacks Investment Research
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