The recent rally in equities has helped stocks move well off their February lows. The panic seen earlier in the year is all but gone for now and some stocks are even moving to 52-week highs. While it might not be wise to chase them higher, these stocks must be watched for a buying opportunity on pullbacks.
The stocks highlighted below have all recently hit 52-week highs and all have a Zacks Rank of #1 (Strong Buy). These stocks are in the top industries and are performing fundamentally well compared to their peers.
Ulta Salon, Cosmetics & Fragrance, Inc. (ULTA) is a Zacks Rank #1(Strong Buy) and is the largest beauty retailer in the United States. The company provides one-stop shopping for prestige, mass and salon products and salon services. Ulta provides affordable indulgence to its customers by combining the product breadth, value and convenience of a beauty superstore with the distinctive environment and experience of a specialty retailer.
Ulta has a market cap of $12 billion and a forward PE of 33. The company sports a Zacks Style Score of “A” in Growth and has expected EPS growth of 19.50%. The company recently had earnings, causing the stock to shoot to 52-week highs where it has been consolidating before taking out the $200 level.
Ulta continues to see revisions to estimates to the upside as analysts expect earnings momentum to continue. Over the last month, revisions have been taken 4.4% higher for fiscal year 2017, from $5.68 to $5.93. During the same time period, revisions for fiscal year 2018 have been raised 5.2%, from $6.80 to $7.16.
Looking at the chart below we see that Ulta has beaten EPS nine quarters in a row. More importantly, the stock has followed making it one of the hottest stocks of 2016.
The company reports May 26th.
Edwards Lifesciences Corp (EW) is a Zacks Rank #1 (Strong Buy) that provides products to treat late-stage cardiovascular disease. The company had good news over the weekend in which it announced that the randomized PARTNER II Trial comparing the SAPIEN XT valve to surgery in intermediate-risk patients successfully achieved its primary endpoint at two years. The stock shot up over 15% on the news to all time highs.
The company has a market cap of $19 billion and a PE of 34. The stock sports Zacks Style Score of “A” in Momentum and has expected EPS growth of 15%. Over the last 60 days, estimates have been for both fiscal year 2016 and 2017.
For the current year estimates have been revised 10% higher from $2.39 to $2.63. For fiscal year 2017, estimates have gone from $2.81 to 3.04, a move of 8%. The recent news has brokers upgrading the stock and will force analyst to revise estimates even higher.
Cincinnati Financial Corporation (CINF) is a Zacks Rank #1 (Strong Buy) that engages in the property casualty insurance business in the United States. It operates through five segments: Commercial Lines Insurance, Personal Lines Insurance, Excess and Surplus Lines Insurance, Life Insurance, and Investments.
The company has a market cap of $11 billion and a forward PE of 25. The stock has a Zacks VGM score of “D”, however it does pay out a dividend of 3%.
For the current year estimates have been revised 3.8% higher from $2.60 to $2.70. For fiscal year 2017, estimates have gone from $2.40 to 2.60, a move of 8.3%.
The company reports on April 26th where it will go for the fourth straight EPS beat.
Coherent, Inc. (COHR) is a Zacks Rank #1 (Strong Buy) that designs, manufactures, and supplies electro-optical systems and medical instruments utilizing laser, precision optic and microelectronic technologies. The company is in an industry that is ranked 1 out 265 in the Zacks Industry Rank.
Coherent has a market cap of $2.6 billion and a forward PE of 24. The stock sports a Zacks Style Score of “B in Momentum.
Estimates for the current year have been revised 4% higher from $3.66 to $3.81. For fiscal year 2017, estimates have gone from $4.40 to 4.60, a move of 4.5%. The company reports on April 27th where it will go for the seventh straight EPS beat.
Inphi Corporation (IPHI) is a Zacks Rank #1 (Strong Buy that provides high-speed analog and mixed signal semiconductor solutions for the communications, datacenter, and computing markets worldwide. The company is in an industry that is ranked 71 out 265 (Top 27%) in the Zacks Industry Rank.
Inphi has a market cap of $1.4 billion and a forward PE of 61. The stock does have a high PE, and is the reason it has a Zacks Style Score of “F” in value. However, the is ignoring that for now as the stock is hitting new highs and sports a Zacks Style Score of “B” in growth and “A” in Momentum.
Estimates for the current year are being revised higher, with fiscal year 2016 being revised 12% higher over the last 60 days. Fiscal year 2017 sees revisions of 16% to the upside, with estimates moving from 78 cents per share to 93 cents per share.
Inphi will go for its seventh straight beat on April 26th. Last quarter the company surprised by over 62%, causing the stock to break out to all time highs.
Top Ranked Stocks In Summary
Stocks at 52-week highs are tempting to chase, but knowing the current market environment there will be chances to get in at lower prices. Keep these stocks on the radar and be patient, wait for pullbacks and pull the trigger when your price comes to you.
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