2 S&P 500 Stocks Hit 52-Week Highs On Friday

A narrow list of new highs emerges from a single industry while the broader market lags.

The S&P 500 has returned -0.6% over the last month. Against that backdrop, a very small group of names is hitting new price levels. As of Friday, September 18, there are 2 S&P 500 stocks trading at their 52-week highs. Both are from the Oil & Gas Refining & Marketing industry, an industry in the Energy sector.

This raises a question: is this concentrated strength a signal, or just an outlier in a weaker tape?

Friday's Full 52-Week-High List

The table below lists all 2 names this screen surfaced, largest first, with one-day, one-week, one-month, and one-year returns:

Are these businesses earning their new highs?

The two names are Marathon Petroleum (MPC) and Valero Energy (VLO). Marathon Petroleum has gained 17.8% over the last month. The company trades at 14.4 times trailing earnings, and its revenue grew 15.0% over the last twelve months, and its operating margin was 7.5%.

Valero Energy has seen its stock gain 19.4% over the last month. It trades at 16.8 times trailing earnings, and its revenue grew 12.6% over the last twelve months, and its operating margin was 7.2%. Both companies show revenue growth and positive margins in their trailing twelve-month results.

So what does a new high really tell you?

A 52-week high list is a map of what is working, and strength can persist. But a price is just a price, not a final verdict on a company's value. The disciplined approach is to treat the list as a starting point for research.

It is a prompt to check if the underlying business fundamentals support the stock's new level. The price tells you what happened. The numbers tell you what the business has been earning.

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.

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 the S&P 500, the S&P MidCap 400, and the Russell 2000. Admire the list; own the system.