22 S&P 500 Stocks Hit 52-Week Highs On Wednesday
Health Care names dominate the list of strongest stocks, raising questions about their high valuations.
Strength in the market is concentrated in a single area. As of Wednesday, August 19, the list of 22 S&P 500 stocks at 52-week highs is overwhelmingly composed of Health Care names, with 18 of them belonging to that sector. The largest company making a new high is Eli Lilly (LLY), with a market value of about $1145.3 billion after a 9.1% gain over the last month.
This raises a critical question for any disciplined investor: are these high-flying valuations supported by the underlying business performance? The ten largest of these names are below.
The 10 Largest, By Market Cap
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- 19 Mid Cap Stocks Just Made New 52-Week Highs
- The 52-Week-High List: 18 Large Cap Names On Wednesday
- Market Movers | Winners: MRNA, PURR, MRVI | Losers: LZB, TMS
The table below shows the 10 largest of the 22 names, sorted by market capitalization, with returns over four windows:
| Tickers | Market Cap |
1D % Chg |
1W % Chg |
1M % Chg |
1Y % Chg |
|---|---|---|---|---|---|
| LLY | $1,145.26 Bil | 4.5% | 5.1% | 9.1% | 84.6% |
| JNJ | $658.21 Bil | 0.8% | 4.8% | 9.1% | 59.0% |
| ABBV | $470.77 Bil | 2.7% | 6.9% | 3.9% | 32.7% |
| KO | $388.69 Bil | 1.7% | 4.2% | 10.2% | 34.4% |
| MRK | $376.24 Bil | 12.6% | 14.5% | 20.5% | 86.8% |
| AMGN | $238.87 Bil | 4.0% | 6.3% | 20.8% | 55.7% |
| PFE | $160.71 Bil | 3.6% | 7.3% | 15.2% | 20.5% |
| VRTX | $140.28 Bil | 4.5% | 5.0% | 14.5% | 41.6% |
| BMY | $137.79 Bil | 2.4% | 6.1% | 11.0% | 47.0% |
| ABNB | $111.46 Bil | 1.7% | 3.5% | 29.3% | 48.5% |
Eli Lilly’s business growth is keeping pace with its stock price.
In addition to being the largest name on the list, Eli Lilly (LLY) has notable fundamentals. The company trades at 42.8 times trailing earnings while its revenue grew 49.6% over the last twelve months. That growth is paired with a 49.7% operating margin. For comparison, AbbVie (ABBV) trades at a higher multiple of 74.6 times trailing earnings, but its revenue grew 10.4% over the same period, with an operating margin of 33.9%.
A new high is a question, not an answer.
A list of stocks at their strongest prices of the year is a useful screen for strength. Often, strong stocks continue to perform. But a price is not a verdict on a company’s quality or future prospects. The disciplined move is to treat a 52-week high as the beginning of the work, not the end. It is an alert to check whether the business itself earns the level the market has awarded it.
A new high tells you what the market already believes. The harder question is which of these runs management itself is underwriting. Our Guidance Momentum screen tracks exactly that: stocks where the company raised its own forward numbers.
One more pattern worth noticing: 18 of the 22 names are Health Care stocks. When a whole group is making new highs together, a healthcare ETF like XLV is one way to own the group’s strength without betting on which single name leads it from here.
Strength Is A Clue. It Is Not A Plan
A stock at its 52-week high has momentum on its side, and momentum is a real force. It is also the most crowded signal in the market, and the difference between a run that lasts and one that tops is always the business underneath.
Checking that business, across thousands of names, is how the Trefis High Quality (HQ) Portfolio is assembled: roughly 30 companies that pass the quality screens, rebalanced on rules. It has a track record of outpacing a benchmark that combines the three major indices – the S&P 500, S&P Mid-cap, and Russell 2000. Let the highs point; let the discipline decide.