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4 Stocks Set to Crush Their 52-Week Highs Soon - Analyst Blog

The latest GDP numbers belied the doom prophets of the U.S. economy, as the figures painted an encouraging picture so far this year. The world’s largest economy grew at a robust 2.3% annualized rate in the second quarter. Not only that, the 0.2% contraction flashed in the beginning of the year has now been revised to growth of 0.6%.

Improved consumer spending — the engine of the U.S. economy — primarily fueled GDP growth. Of course the support from improved housing climate and employment gains was no less.

While the numbers are barely noteworthy, they point to resilience and concrete expansion in the face of remarkable currency headwinds and global shake-ups, most notably the Greek debt crisis and China's stock market bubble trouble.

In fact, projected trends in consumer spending for the coming months look promising and are trending upward thanks to robust job gains, which will prove to be a boon for the stock market. However, muted inflation figures, the notorious debate over the impending rate hike, and global commotion still hold the potential to cast a dark spell of volatility over the U.S. market.

We feel that in this sensitive market that is trending up or down so frequently, investors can leverage the famed “Momentum Anomaly” to ride price appreciation of stocks and make handsome gains.

The Momentum Anomaly of Fast Markets

The Momentum Anomaly theory simply states that what has been strongly going up in the past will probably continue to do so in the imminent future. Momentum investors basically seek to take advantage of market volatility on the premise that once a trend is established, it is more likely to continue in that direction than to move against the drift.

We now live in a world of fast markets, fast money and jam-packed trades. In a sense, everyone today is a momentum trader, scouring for the next hot sector or stock where they can make a fast buck. Even though it is crucial for investors to avoid chasing fads blindly to risk getting trapped, the current market presents plenty of occasions when the most apt move is to buy high and sell even higher.

Buy High, Sell Higher: A Fascinating Strategy

Today, we have screened stocks that are presently trading near their 52-week highs and look ready to break out and chart new year-long highs. Moreover, in this brave new era when investing fundamentals have become quaint back-seat notions, our stocks boast impressive fundamental metrics and a solid Zacks Rank.

Granted, “old-school” investors may be wary of getting into such stocks, citing high valuation and limited upside. However, at times, a strong price uptrend implies robust demand for the stock, which is often backed by either good earnings performance or strong growth metrics or both.

The Zacks Style Score Seasoning

Notwithstanding the captivating, time-proven strategy and robust fundamentals, the question remains: When to get in?

Here we usher in our new style score system. The Zacks Momentum Style Score indicates when the timing is best to grab a stock and take advantage of its momentum with the highest probability of success. Back-tested results show that stocks with Style Scores of ‘A’ or ‘B,’ when combined with a Zacks Rank #1 (Strong Buy) or 2 (Buy) handily outperform other stocks.

We have also added a good Growth Style Score to our screen, which gives a true sense of the quality and sustainability of a company’s growth.

4 High-Flying Stocks Set to Chart New 52-Week Highs

Flaunting a Zacks Rank #1 and a Momentum Style Score of ‘A,' the following stocks that are trading near their 52-week highs still appear to have plenty of upside, and strong upward impetus to boot.

Further, these picks have solid growth metrics, and have been seeing solid earnings estimate revision activity of late.

BJ's Restaurants, Inc. BJRI

Headquartered in Orange County, CA, BJ’s Restaurants owns and operates a chain of 147 high-end casual dining restaurants in 17 states. The company has been benefiting from the recent macro trends, as declining oil prices and recovering labor market have boosted demand for high-quality casual dining.

Analysts have become increasingly bullish on the company over the past month, with 13 upward estimate revisions for the company’s 2015 earnings. This has led to a sharp spike in the Zacks Consensus Estimate for 2015, which now stands at $1.49, up from $1.40 a month ago.

Currently trading at $51.56 a share, this restaurant stock has added nearly 48% over the past year, and is within reach of its 52-week high of $55.44 that it carved in mid February.

Gilead Sciences Inc. GILD

Foster City, CA-based Gilead is famed for its ground-breaking hepatitis C virus (HCV) drug portfolio, especially the revolutionary Sovaldi. Additionally, Gilead has a productive HIV/AIDS pipeline.

Not only does the stock have an impressive short-term momentum, it has been witnessing solid activity on the earnings estimate revision front as well. Analysts clearly see good things in the company’s future, as the Zacks Consensus Estimate for 2015 earnings has trended sharply up over the past month, from $11.04 to $11.99.

This biopharma powerhouse has climbed 28% over the past year, and at $117.86, it is in the ball park of its 52-week high of $123.37 that it scaled in June.

Scorpio Tankers Inc. STNG

Scorpio Tankers is a provider of marine transportation of petroleum products worldwide. The company generally transports products towards the end of the supply chain, with most of their fleet carrying gasoline and fuel from refineries to end users. As oil supplies remain abundant, the worldwide demand for tankers is high, which will benefit the company in coming times.

Analysts have great expectations from the company this year and have been revising 2015 earnings estimates upward over the past month. Scorpio Tankers has seen 7 positive revisions over the past 4 weeks, resulting in its 2015 estimate climbing from $1.14 to $1.34.

The company’s stock price been charting upward over the past year, and has climbed 15%. Currently trading at $10.74, the stock looks poised to knock down its 52-week high of $11.64 that it touched just last month.

Teekay Tankers Ltd. TNK

Headquartered in Bermuda, Teekay Tankers is one of the world’s largest marine energy transportation, storage, and production companies. The company serves internationally and owns approximately 170 liquefied gas, offshore and conventional tanker assets. With global energy demand rising and the ban on U.S. crude oil exports softening, shipping companies like Teekay Corporation are preparing to capitalize on the crude export boom.

Analysts have become increasingly bullish on the company over the past month, with 4 upward estimate revisions for the company’s 2015 earnings. This has led to a sharp spike in the Zacks Consensus Estimate for 2015, which now stands at $1.54, up from $1.31 a month ago.

Currently trading at $7.17 a share, this shipping stock has seen an impressive uptrend over the past year, adding nearly 77% to its stock price. The stock looks set to carry its momentum forward and demolish its 52-week high of $7.88 that it attained in June quite soon.

Pay Attention to These Screamers

Momentum stocks have only recently regained their lost mojo, and are revving up again, indicating that risk taking is still in vogue with investors. With their solid Zacks Rank and Style Scores, our picks command attention with their strong momentum and robust earnings estimate revisions.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
BJ'S RESTAURANT (BJRI): Free Stock Analysis Report
 
GILEAD SCIENCES (GILD): Free Stock Analysis Report
 
SCORPIO TANKERS (STNG): Free Stock Analysis Report
 
TEEKAY TANKERS (TNK): Free Stock Analysis Report
 
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