The 52-Week-High List: 13 S&P 500 Names On Tuesday

A short list of market leaders is showing strength, with notable clusters in health care and energy.

Johnson & Johnson (JNJ), a company with a market value of about $652.7 billion, is trading at its strongest price of the last year. It leads a list of 13 S&P 500 stocks making new 52-week highs on Tuesday.

The list is narrow, but strength is clustered in industries like Oil & Gas Refining & Marketing and Pharmaceuticals. The central question is whether this concentrated strength reflects a broader market conviction or just isolated stories. The full list of names follows.

The 10 Largest, By Market Cap

The table below shows the 10 largest of the 13 names, sorted by market capitalization, with returns over four windows:

Is every new high built on the same foundation?

Consider two large pharmaceutical names on the list. Johnson & Johnson (JNJ) has gained 9.0% over the last month and trades at 31.0 times trailing earnings. Its revenue grew 8.1% over the last twelve months.

Amgen (AMGN) has seen a sharper run, up 16.8% over the last month. It trades at a lower multiple of 26.3 times trailing earnings, with revenue growth of 9.1% and an operating margin of 30.0%.

A 52-week high is a starting point, not a conclusion.

Strength often persists, and a stock at its high has by definition rewarded its owners. But a price is not a verdict on a business. The disciplined next step for any name on this list is to ask whether the underlying fundamentals support the new valuation. A high price is earned only if the business itself is performing at a high level.

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.

One more pattern worth noticing: 6 of the 13 names are Energy stocks. When a whole group is making new highs together, an energy ETF like XLE 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.