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3 Stocks Near 52-Week Highs Worth Selling

Sean Williams
November 23, 2011

Although Congress is doing the best it can to sack the stock market, it wasn't enough to keep hundreds of companies from marching on to near 52-week highs. For optimists, these rallies may seem like a dream come true. For skeptics like me, they're opportunities to see whether companies trading near 52-week highs have earned their current valuations.

Keep in mind that some companies do deserve their current valuations. Despite a nearly 30-month low in consumer confidence, Nike (NYSE: NKE  ) keeps putting one foot in front of the other and stepping higher. Following a 12% earnings beat in September, the shoe juggernaut appears unstoppable and uncatchable among its peers.

Still, other companies might deserve a kick in the pants. Here's a look at three companies that could be worth selling.

Discount central
Shareholders of department store Macy's (NYSE: M  ) have been riding high since the lows of 2009. The highly levered company was able to avoid its debt woes and has turned in two impressive years in a row. But I'm afraid that streak may be coming to an end.

Although Macy's sells a wide variety of merchandise, from clothes to appliances, I can't help taking cues from recent weakness in Chico's (NYSE: CHS  ) and Abercrombie & Fitch (NYSE: ANF  ) as a call for concern. Chico's profits fell short of expectations, largely because of higher levels of discounts, while Abercrombie felt the pangs of a slowdown in Europe and rising material costs. Add this together with already low consumer-confidence figures, and you have a recipe where even the former leader in each respective sector isn't safe. Make no mistake -- with nearly $7 billion in debt still on its books, Macy's could very easily deflate from its recent highs.

Don't play this game of chicken
Being a producer of pork and poultry is downright difficult right now. Prices for feeding livestock are rising, and the market for poultry, especially in restaurants, has been lagging. You wouldn't know that, however, by looking at Sanderson Farms' (Nasdaq: SAFM  ) stock price, which is nearing a new high.

The poultry producer in August reported a quarterly loss that was more than 150% worse than an