3 Top Performers Trading Below Their 52-Week Highs

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  • One of the difficult things with the market at its current level is that its at a crossroads. Does the S&P 500 hold $2950 and run to the all-time high, or is it vulnerable for a more significant pull-back at the current level?

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  • There isn’t a clear answer to this. As you look at what’s happening to earnings projections for the next couple quarters and the current fiscal year, it should raise all sorts of concerns about the intermediate term risk and reward of being long the market. However, with tremendous Federal Reserve stimulus, there is the tendency for investors to just go with it.

    As you look for opportunities, do you want companies that have taken off on a rocket ship and trading at exorbitant prices, or do you look for strong performers that are still trading below their 52-week high?

    This list focuses on those companies that have a market cap over $500 million, trading with reasonable liquidity, trading below their 52-week high, but have been some of the best performers in the 1-month, 3-month and 6-month timeframes. The final criteria is that the 1-week performance has to be less than 5%.

    Top Performer #1: Farfetch Ltd. (FTCH)

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  • Farfetch Limited (Farfetch) is a technology platform for the global fashion industry. The Company operates the global digital marketplace at scale, connecting brands, retailers and consumers. The CEO and Co-Chair Jose Neves discussed the current COVID-19 climate for their business in their most recent earnings announcement:

    “But one thing that has become evident over the past weeks, is that the world will not go back to the same ‘normal’ as we knew it pre-COVID-19. As we consider the structural changes that will likely impact the luxury industry, I am confident that our unique set of capabilities position Farfetch to be even stronger in the future.”

    The company is currently trading nearly 35% below their 52-week high, but has risen 55% in the past 6 months, 16% in the past 3 months and 20% in the past month. The price is currently testing its support near $13.50 and is a long opportunity on a close above $15.

    Top Performer #2: Range Resources Corp (RRC)

    Range Resources Corporation is an independent natural gas, natural gas liquids (NGLs) and oil company. The Company is engaged in the exploration and production of natural gas, NGLs and oil in the United States. Commenting on the challenges of the current environment, CEO Jeff Ventura said:

    “The Range team has met the unique challenges of working through this pandemic with dedication and compassion, making sure that our business plans remains on track, while prioritizing health and safety. Range continues to make steady progress on key near-term objectives: improving our cost structure, bolstering liquidity, and operating safely while maintaining peer-leading capital efficiency. These efforts have positioned Range to successfully navigate the current commodity environment and benefit from an improved outlook for natural gas and natural gas liquids, particularly given Range’s peer-leading drilling inventory.”

    The company is currently trading nearly 35% below their 52-week high, but has risen 51% in the past 6 months, 81% in the past 3 months and 22% in the past month. The price is currently bouncing off of its support near $4.89 and is a long opportunity with a close above $6.75.

    Top Performer #3: Merit Medical Systems (MMSI)

    Merit Medical Systems, Inc. is a manufacturer and marketer of disposable medical devices used in a range of interventional, diagnostic and therapeutic medical procedures. The Chairman and CEO Fred P. Lampropoulos discussed the limitations and the effect on their business during their most recent report where they suspended guidance:

    “The COVID-19 pandemic has been a historic shock to the economy, our industry and our country. I have been very impressed with how my colleagues at Merit have come together to support our customers, our patients and our company. While we anticipate headwinds in several of our business lines, I am confident that the diversity of the business, the strength of our people and our strong balance sheet position us well for recovery when that becomes more clear.”

    The company is currently trading nearly 21% below their 52-week high, but has risen 61% in the past 6 months, 6% in the past 3 months and 14% in the past month. MMSI is a long opportunity with it’s close above it’s recent resistance around $43 on above average volume.

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