Where The Buying Ran Strongest: 41 Small Cap Stocks At 52-Week Highs
A small group of stocks is hitting new highs against a falling market, but the reasons for their strength vary widely.
On Thursday, 41 Small Cap stocks reached their 52-week highs, a notable pocket of strength while the S&P 500 has returned -0.7% over the last month. The list is led in size by Bruker (BRKR), with a market value of about $9.8 billion, and shows clusters in sectors from Biotechnology (6 names) to Oil & Gas Refining & Marketing (3 names).
With such a diverse group finding favor in a down tape, the central question is which of these businesses are actually earning their new prices. The list below is a starting point.
The Biggest Names On The List
The table below shows the 10 largest of the 41 names, sorted by market capitalization, with returns over four windows:
| Tickers | Market Cap |
1D % Chg |
1W % Chg |
1M % Chg |
1Y % Chg |
|---|---|---|---|---|---|
| BRKR | $9.8 Bil | 4.2% | 3.5% | 6.9% | 53.8% |
| MSGS | $9.8 Bil | 1.6% | 2.7% | 0.8% | 101.4% |
| GKOS | $9.8 Bil | 4.2% | 10.8% | 20.6% | 79.7% |
| APGE | $9.4 Bil | 0.1% | 0.0% | 1.2% | 254.1% |
| EAT | $9.1 Bil | 2.0% | 13.4% | 24.9% | 31.6% |
| LNC | $8.8 Bil | 11.1% | 12.7% | 31.7% | 37.5% |
| PBF | $8.6 Bil | 15.4% | 18.0% | 60.6% | 197.0% |
| NEU | $8.1 Bil | 10.1% | 12.6% | 9.6% | 28.1% |
| AXTA | $7.7 Bil | 3.4% | 13.7% | 5.3% | 25.5% |
| PB | $7.5 Bil | 0.8% | 2.9% | 2.5% | 15.0% |
Does the business performance match the stock performance?
Consider the contrast between two names. Glaukos (GKOS) has gained 20.6% over the last month, backed by revenue that grew 41.5% over the last twelve months. But that growth came with an operating margin of -31.3%.
Elsewhere, Brinker International (EAT) trades at 19.6 times trailing earnings. Its revenue grew 11.8% over the last twelve months, and it produced a positive operating margin of 10.7%. Both are at highs, but for very different underlying reasons.
So is a 52-week high a buy signal or a warning?
It is neither. A stock at its strongest price of the last year is a sign of market approval, and strength often persists. But a price is not a verdict on the business itself.
A 52-week-high list is best used as a powerful screen for ideas. The disciplined next step is to investigate whether the company’s fundamental performance justifies the market’s enthusiasm. The work begins, it does not end, with this list.
Before chasing any name on this list, ask what the company itself expects next. Our Guidance Momentum screen surfaces the stocks whose managements just raised their own outlooks, which is the momentum that tends to have staying power.
Chasing Highs Is A Reflex. Owning Strength Is A System
A 52-week-high list is seductive: everything on it has been going right. But buying a stock because it is at its high is buying a price, and prices revert; what persists is the quality underneath the run.
The Trefis High Quality (HQ) Portfolio is built to own that quality before and after it makes headlines: roughly 30 businesses selected for consistent cash generation, strong margins, and resilient balance sheets, sized and rebalanced with rules. It has a track record of outpacing a benchmark that combines all major indices – the S&P 500, S&P Mid-cap, and Russell 2000. Admire the list; own the system.