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

This article outlines a strategy for identifying stocks trading near 52-week highs that still possess significant upside potential, challenging the common investor assumption of overvaluation. The methodology combines momentum investing with fundamental analysis, utilizing a screen that filters for strong earnings growth expectations, robust value metrics (e.g., P/S and P/E below industry median), recent price appreciation, and a Zacks Rank #1. Four specific companies—Flowserve (FLS), Zions Bancorporation (ZION), Astronics (ATRO), and CommScope (COMM)—are presented as current examples that meet these criteria, each supported by distinct operational strengths and favorable market conditions.

Analysis

The analysis presents a quantitative screening strategy for identifying momentum stocks that retain upside potential, countering the common assumption that stocks near 52-week highs are inherently overvalued. The methodology combines technical indicators (trading within 20% of 52-week high with positive 4 and 12-week price changes) with fundamental filters, such as P/S and forward P/E ratios below industry medians and superior EPS growth. Four companies are highlighted as passing this screen. Flowserve (FLS) is positioned to benefit from industrial and energy market strength, with its 2025 EPS consensus estimate revised up 0.9% to $3.37, driven by its 3D strategy and exposure to AI-related data center growth. Zions Bancorporation (ZION) demonstrates financial health with an improved common equity tier 1 ratio of 11% and a completed $40 million share buyback, supported by four consecutive quarters of earnings beats averaging 12.1%. Astronics (ATRO) is a direct beneficiary of the aerospace recovery, posting record Aerospace unit sales of $193.6 million (+9% YoY) and an exceptional average earnings surprise of 78.54%. Finally, CommScope (COMM) represents a restructuring play, divesting non-core assets while acquiring Casa Systems' Cable Business to bolster its market position, although its 2025 EPS consensus estimate has seen a minor 0.8% downward revision.

Key Decisions for Investors

• Investors could adopt the described screening method, which combines momentum with relative value and growth metrics, to identify potential GARP-style momentum candidates that may not be overvalued despite trading near 52-week highs.
• For the specific stocks mentioned, focus should be on their unique catalysts: monitor Astronics (ATRO) for continued execution in the aerospace recovery, Flowserve (FLS) for booking trends tied to its 3D strategy, Zions (ZION) for future capital return policies, and CommScope (COMM) for successful integration of its recent acquisition.
• Despite the positive screening results, it is crucial to monitor underlying fundamentals, as price momentum is not a guarantee of future performance; the slight downward earnings revision for CommScope (COMM) and the mixed earnings surprise history for Flowserve (FLS) highlight the need for ongoing due diligence.