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.
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.
Investors might lose out on top gainers in an attempt to avoid the steep prices.
Stocks such as PRA Group PRAA, Centene CNC, BILL Holdings, Inc. BILL and Par Pacific PARR 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 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.
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 encourage 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.
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 >= .11: 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.
1-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 <=2: 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) or #2 (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 our four picks out of the 15 stocks, each carrying a Zacks Rank #1, that made it through the screen:
PRA Group is building fundamental momentum as its PRA 3.0 strategy accelerates. A comprehensive second-quarter 2026 review of European portfolios yielded a $349 million uplift in estimated remaining collections (ERC), bringing total ERC to $8.9 billion — a development the company expects to translate into higher portfolio income going forward.
Adjusted EBITDA expanded 10% to $1.4 billion for the 12 months ended June 30, 2026, reflecting cost discipline and AI-enhanced capabilities. Call center consolidation and workforce efficiencies continue to compress the cost base. The board's new $150 million share repurchase program, authorized on Aug. 3, 2026, signals balance sheet confidence. With $998 million in credit facility availability and $219 million in forward-flow commitments, PRA's capital positioning strongly supports near-term portfolio deployment and earnings growth.
The Zacks Consensus Estimate for the company’s 2026 earnings has increased by 56% to $3.93 per share in the past 30 days. PRAA’s earnings surpassed the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 107.88%.
Centene's fundamental recovery is gaining strength, underpinned by improving profitability, raised guidance and purposeful leadership changes. The company raised its full-year 2026 adjusted EPS guidance to greater than $4.80, with premium and service revenues growing 4% year over year to $44.4 billion in second-quarter 2026. The consolidated HBR improved to 89.6%, with Commercial HBR tightening sharply to 79.2%, reflecting disciplined pricing and improved risk transfer. Operating cash flow of $3.6 billion reinforces a strengthening balance sheet.
In August 2026, Centene reaffirmed full-year guidance alongside a structured CFO succession plan, signaling management's confidence. The appointment of a new chief information officer tasked with boosting data, technology, and AI strategic capabilities positions Centene favorably for enhanced operational efficiency in the near term.
The Zacks Consensus Estimate for the company’s 2026 earnings has moved 7% north to $4.89 per share in the past 30 days. CNC surpassed the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 151.28%.
BILL Holdings is positioned for a constructive near-term trajectory, anchored in strong forward guidance and deliberate organizational transformation. For fiscal 2027, the company guided core revenue growth of 11–14%, targeting $1.669–$1.719 billion, with non-GAAP operating income expected between $421 million and $451 million — a meaningful step up from fiscal 2026.
On July 6, 2026, newly appointed chief revenue officer Jonathan Leaf assumed leadership of BILL's global revenue organization, spanning sales, marketing, and customer experience. The company's accelerating AI-native transition, embedded across its integrated AP, AR, spend, and expense platform, strengthens its competitive position with the Fortune 5 million. With 9.2 million network members, rising payment volumes, and a $1 billion share repurchase authorization, BILL's near-term outlook remains fundamentally sound.
The Zacks Consensus Estimate for the company’s fiscal 2027 earnings has moved 11.2% north to $3.68 per share in the past 30 days. BILL’s earnings surpassed the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 19.82%.
Par Pacific's near-term fundamentals appear favorably positioned. Hawaii's annual turnaround is substantially complete, with most processing units back online and ready to capitalize on elevated crack spread margins across all four refining locations. The $500 million Senior Notes offering, closed in May 2026, reduced term debt by over $130 million, yielding net term debt of $321 million and total liquidity of $1.4 billion.
In August 2026, Par Pacific agreed to divest its Laramie Energy stake for approximately $146 million, further enhancing capital flexibility. The Hawaii renewable fuels facility entered commercial operations in April 2026, adding a new revenue stream. A guided 2026 capital plan of $190–$220 million spanning refining, logistics, and retail growth reflects management's confidence in the near-term trajectory.
The Zacks Consensus Estimate for the company’s 2026 earnings has moved 14.7% north to $21.33 per share in the past 30 days. PARR surpassed the Zacks Consensus Estimate twice in the trailing four quarters while missing the same twice, with the average surprise being 48.67%.
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PRA Group, Inc. (PRAA): Free Stock Analysis Report
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BILL Holdings, Inc. (BILL): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).