Yahoo Finance Zacks.com featured highlights include Unum, Graphic Packaging Holding, AutoNation and Sanofi
For Immediate Release
Chicago, IL – April 20, 2023 – Stocks in this week’s article are Unum Group UNM, Graphic Packaging Holding Co. GPK, AutoNation AN and Sanofi SNY.
4 Stocks Trading Near 52-Week Highs That Can Trend Higher
Investors generally consider a 52-week high as a good criterion to determine an entry or exit point for a given stock. However, 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 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 Unum Group, Graphic Packaging Holding Co., AutoNation and Sanofi 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 technique borrows from the basics of momentum investing and 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.
Overvaluation is natural for most of these stocks as investors' focus (or willingness to pay the 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 our four picks of the 23 stocks that made it through the screen:
Graphic Packaging Holding Company provides fiber-based packaging to food, beverage, foodservice and other consumer products companies in the Americas, Europe and the Asia Pacific. Graphic Packaging made a big strategic acquisition in 2021 and bought AR Packaging, thereby expanding its reach to Europe.
The company continues to develop innovative packaging solutions, which along with solid demand, strong pricing and improving productivity, are contributing to year upon year of stronger-than-expected sales growth. Since it caters to the market for essential goods, its good fortunes should extend into the foreseeable future.
The company currently has a Zacks Rank of 1. The Zacks Consensus Estimate for GPK's 2023 earnings has moved north by 0.4% to $2.75 per share in the past 30 days. The company surpassed the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 14.25%.
Unum Group was created following the June 1999 merger of Provident Companies, Inc. and Unum Corporation. Along with disability insurance, the company provides long-term care insurance, life insurance, employer- and employee-paid group benefits and related services. Unum's conservative pricing and reservation practices have contributed to overall profitability.
Sustained increase in premiums is fueled by high persistence levels in core business and strong sales volume along with solid benefits experience. Geographic expansion has been paying off as acquired dental insurance businesses are growing in the United States and the U.K. We believe strong operating results have led to a solid level of statutory earnings and capital, boosting financial flexibility.
The company currently has a Zacks Rank of 1. The Zacks Consensus Estimate for UNM's 2023 earnings has moved north by 0.9% to $6.72 per share in the past 30 days. The company surpassed the Zacks Consensus Estimate thrice in the trailing four quarters while missing the same once, the average surprise being 32.25%.
AutoNation's diversified product mix and multiple streams of income reduce risk profile and augur well for earnings and sales growth. The company's 2021 buyouts of Priority 1 Automotive and Peacock Automotive's 11 dealerships are set to add $380 million and $420 million in annualized revenues, respectively.
Enhanced digital solutions have helped AutoNation to further boost profitability and market presence. Initiatives like ship-to-home next day, curb-side pick-up option, and buy online, pick-up in stores options are picking pace, driving additional traffic to the company's online site. Its robust share repurchase program and digitization efforts are commendable.
The company currently has a Zacks Rank of 2. The Zacks Consensus Estimate for AN's 2023 earnings has moved north by 0.2% to $20.73 per share in the past 30 days. The company surpassed the Zacks Consensus Estimate thrice in the trailing four quarters while missing the same once, the average surprise being 4.76%.
Sanofi manufactures and markets prescription drugs in Europe, the United States and other countries. It focuses on major therapeutic areas such as immunology, neurology, oncology, rare disease, rare blood disorders and diabetes, among others. Sanofi's Specialty Care unit is on a strong footing, particularly with the regular label expansion of Dupixent, which has become the key top-line driver for Sanofi.
With outside U.S. revenues accelerating and multiple approvals for new indications, its sales are expected to be higher. Sanofi possesses a leading vaccine portfolio. Its R&D pipeline is strong. Several data readouts are expected in 2023. It has also launched several new drugs in the past couple of years and is expanding its pipeline through M&A deals.
The company currently has a Zacks Rank of 2. The Zacks Consensus Estimate for SNY's 2023 earnings has moved north by 0.2% to $4.41 per share in the past 30 days. The company surpassed the Zacks Consensus Estimate thrice in the trailing four quarters while missing the same once, the average surprise being 7.68%.
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For the rest of this Screen of the Week article please visit Zacks.com at: https://www.zacks.com/stock/news/2080877/4-stocks-trading-near-52-week-high-that-can-scale-higher
Disclosure: Officers, directors and/or employees of Zacks Investment Research may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material. An affiliated investment advisory firm may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material.
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Sanofi (SNY) : Free Stock Analysis Report
AutoNation, Inc. (AN) : Free Stock Analysis Report
Unum Group (UNM) : Free Stock Analysis Report
Graphic Packaging Holding Company (GPK) : Free Stock Analysis Report
