S&P 500 Stocks at New Highs: What's Behind Their Rally?

Fourteen S&P 500 stocks have reached new 52-week highs, but their underlying business stories vary widely. The list is dominated by companies from the Asset Management & Custody Banks and Oil & Gas Refining & Marketing industries.

Merck (MRK) leads the list with a market value of $336.1 billion, trading at a new 52-week high and 105.8 times trailing earnings on revenue growth of 4.6%. Amgen (AMGN), another stock in the top 10, has gained 14.5% over the last month, with 9.1% revenue growth over the last twelve months and a 30.0% operating margin.

Marathon Petroleum (MPC) from the Energy sector shows revenue growth of 15.0% and an operating margin of 7.5%, while trading at 12.1 times trailing earnings. The disciplined approach is to look past the price and examine whether the business itself supports its new valuation.

A stock at its 52-week high has momentum on its side, but it's also a crowded signal in the market. The Trefis High Quality (HQ) Portfolio, which tracks roughly 30 companies that pass quality screens, has outpaced a benchmark combining the S&P 500, S&P Mid-cap, and Russell 2000 indices.