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Zacks.com featured highlights PBF Energy, Pilgrim's Pride, Avnet, Oasis Petroleum and Delek US Holding
Zacks Equity Research
8 min read

In This Article:

For Immediate Release

Chicago, IL – May 24, 2022 – Stocks in this week’s article are PBF Energy Inc. PBF, Pilgrim's Pride Corp. PPC, Avnet Inc. AVT, Oasis Petroleum OAS and Delek US Holdings, Inc. DK.

5 Stocks Trading at 52-Week Highs That Can Climb Further

Investors generally consider 52-week high as a criterion to pick stocks. This is because stocks near that level are perceived to be winners.

However, 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.

In fact, investors might lose out on top gainers in an attempt to avoid the steep prices.

Stocks such as PBF Energy Inc., Pilgrim's Pride Corp., Avnet Inc., Oasis Petroleum and Delek US Holdings, Inc. are expected to maintain the momentum and keep scaling new highs. More information on a stock is necessary to understand whether or not there is scope for further 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 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 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 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.

Here are the five of the 26 stocks that made it through the screen:

PBF Energy is a leading refiner of crude. Through five oil refineries and associated infrastructure in the United States, the company provides end products that comprise heating oil, transportation fuels, lubricants and many related products. The company's daily processing capacity of 1,000,000 barrels of crude is higher than most of its peers. It has one of the most complex refining systems in the United States, with an overall Nelson Complexity Index reading of 13.2. The company currently sports a Zacks Rank of 1 and has a VGM Score of A.

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