4 Stocks Trading Near 52-Week High With More Upside Potential

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 completely baseless, not all stocks hitting a 52-week high are necessarily overpriced.

Investors may lose out on top gainers in an attempt to avoid the steep prices.

Stocks such as Envista NVST, Reliance, Inc. RS, The Hanover Insurance Group THG and Lenovo Group LNVGY 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.”

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 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 are no tangible negatives. 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 and sales, ensuring the continuation of their rally for some time.

Current Price/52 Week High >= .80: 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 0.8 implies the stock is trading within 20% of its 52-week high range.

% Change Price – 4 Weeks > 0: This 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 >= 5: This parameter will help screen stocks that are trading at $5 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 21 stocks that made it through the screen:

Envista Holdings is well-positioned to deliver sustained near-term momentum, supported by strong fundamentals and a notably upgraded financial outlook. Management raised full-year 2026 guidance in August, lifting core sales growth to 3.5-4.5%, adjusted EBITDA growth to 11-14%, and adjusted EPS to $1.50-$1.55. Both reporting segments — Specialty Products & Technologies and Equipment & Consumables — delivered positive core growth across all major geographies. The Envista Business System continues driving disciplined margin expansion, with adjusted EBITDA margin at 14.7%, up 230 basis points year-on-year. Q2 2026 free cash flow reached $105 million, with approximately $283 million in remaining share repurchase capacity. An Investor Day, announced in late July 2026 and scheduled for Sept. 17, further underscores management's confidence in communicating its forward growth strategy.

The stock has lost 5.1% in the past six months. It has a trailing four-quarter earnings surprise of 19.41%, on average.

Reliance, Inc. is well-positioned to sustain earnings momentum in the second half of 2026, supported by several key fundamental tailwinds. The U.S. border wall contract, awarded to subsidiary AMI Metals earlier this year, continues delivering above-expectation contributions, with third-quarter 2026 shipments expected to add approximately 60 cents per share to earnings. Management's third-quarter guidance calls for non-GAAP EPS of $6.40–$6.60, indicating year-over-year growth of 76–81%. End-market demand is broadening across data centers, defense, commercial aerospace, and semiconductors. Extending mill lead times and tightening inventories reinforce near-term pricing power. Net debt/EBITDA of just 0.9X supports continued stockholder returns, including a $1.25 quarterly dividend declared July 17, 2026, payable Aug. 28, 2026, with $529 million still available under its repurchase program.
    
The stock has returned 20.6% in the past six-month period. It delivered a trailing four-quarter earnings surprise of 3.15%, on average. 

The Hanover Insurance Group's fundamental earnings engine continues to strengthen with disciplined underwriting delivering a combined ratio of 91.2% in the second quarter of 2026 — 85.5% excluding catastrophes — and net investment income rising 13.4% on higher earned yields. Management guidance points to Personal Lines policy-in-force growth turning sequentially positive by year-end, with renewal pricing remaining above long-term loss cost trends. Core Commercial net premiums grew 7.2%, while Specialty retains further room for acceleration. The July 2026 CEO succession announcement, with internal veteran Dick Lavey named CEO-elect, ensures strategic continuity. A Sept. 17 Investor Day, where management will outline its five-year strategic and financial plan, marks a meaningful near-term catalyst. Ongoing capital return — including an active $700 million repurchase program — underscores management's confidence in durable earnings power.

This stock has surged 25.5% over the past six months. It has a trailing four-quarter negative earnings surprise of 27.33%, on average. 

Lenovo's Hybrid AI strategy is gaining meaningful traction as enterprise demand accelerates. The Infrastructure Solutions Group's AI server pipeline has expanded to $54 billion — up 157% quarter-on-quarter — with the company now ranked #2 globally in x86 server revenues. AI-related revenues account for 35% of total Group revenues, up 60% year over year, demonstrating deepening business model transformation. SSG's AI services revenue is growing at triple-digit rates, with operating margins reaching a record 24.2%. R&D spending is up 30% year over year, reinforcing its innovation pipeline. Global AI PC market share climbed to 25.1%, underpinned by the recently expanded North Carolina manufacturing facility, adding meaningful server capacity. July's FIFA World Cup AI deployments across all 48 teams further validate Lenovo's enterprise AI execution at scale.

This stock has gained 216% in the past six months. It has a trailing four-quarter earnings surprise of 84.83%, on average. 

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This article originally published on Zacks Investment Research (zacks.com).

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