Buckle Up for More Retail Earnings

TheStreet.com

NEW YORK (TheStreet) -- My major focus this week is on 18 buy-rated stocks in the retail-wholesale sector that report quarterly results.

On Monday, I profiled the front nine and today it's the back nine. I am calling an earnings beat a birdie, a match a par, and a miss a bogey. An under-par round of earnings from buy-rated retail stocks will be a key to sustaining the upward momentum to the overall stock market.

The stock market remains under a ValuEngine Valuation Warning which intensified this morning with 72.8% of all stocks overvalued, and with 34.5% of these overvalued by 20% or more.

Among the 16 sectors tracked by ValuEngine, 15 are overvalued, 14 by double-digit percentages. Six of these sectors are now overvalued by more than 20% led by the retail-wholesale sector by 23%. This sector of 360 stocks includes 224 or 62.2% with buy ratings, which continues my overweight rating for the sector.



Tomorrow I will profile the buy-rated names in the Dow industrial average, which set another all-time high at 13,391.84 on Monday.

Today the number of buy-rated stocks declined to 15 after IBM ($207.60) was downgraded to hold from buy this morning.

There are 13 hold-rated stocks in the Dow and two sell-rated names; Caterpillar ($88.33) and DuPont ($55.93).

Here are the profiles for the back nine of this week's retail earnings:

Reading the Table

Reading the Table

OV/UN Valued: Stocks with a red number are undervalued by this percentage. Those with a black number are overvalued by that percentage according to ValuEngine.

VE Rating: A "1-engine" rating is a strong sell, a "2-engine" rating is a sell, a "3-engine" rating is a hold, a "4-engine" rating is a buy and a "5-engine" rating is a strong buy.

Last 12-Month Return (%): Stocks with a red number declined by that percentage over the last 12 months. Stocks with a black number increased by that percentage.

Forecast 1-Year Return: Stocks with a red number are projected to decline by that percentage over the next 12 months. Stocks with a black number in the table are projected to move higher by that percentage over the next 12 months.

Value Level: Price at which to enter a GTC limit order to buy on weakness. The letters mean; W-weekly, M-monthly, Q-quarterly, S-semiannual and A-annual.

Pivot: A level between a value level and risky level that should be a magnet during the time frame noted.

Risky Level: Price at which to enter a GTC limit order to sell on strength.

Two companies report quarterly results after the close on Wednesday: Limited Brands ($51.81) set its multiyear high at $53.33 on May 8. The weekly chart profile is positive with the five-week modified moving average (MMA) at $49.72. My monthly value level is $48.15 with a quarterly risky level at $54.56.

PetSmart ($69.33) traded to a 2013 high at $70.71 on May 13. The weekly chart stays positive given a weekly close above the five-week MMA at $67.68. My monthly value level is $63.16 with a weekly risky level at $71.70.



Three companies reporting quarterly results pre-market on Thursday: Buckle ($55.81) set its multiyear high at $55.82 on May 20. The weekly chart profile is positive but overbought with the five-week MMA at $50.87. My weekly value level is $51.49 with no risky levels.

Dollar Tree ($49.47) set a 2013 high at $50.64 on May 16. The weekly chart remains positive but overbought given a weekly close above the five-week MMA at $48.14. My semiannual value level is $47.35 with a weekly pivot at $50.07 and semiannual risky level at $50.27.

Ross Stores ($65.12) set a 2013 high at $66.60 on May 9. The weekly chart profile is positive but overbought with the five-week MMA at $63.83. My quarterly value level is $54.84 with a weekly risky level at $68.64.

Two companies reporting quarterly results after the close on Thursday: Gap ($41.06) set a multiyear high at $41.49 on May 15. The weekly chart profile is positive but overbought with the five-week MMA at $38.83. My monthly value level is $33.95 with a weekly risky level at $41.33.

Williams Sonoma ($55.59) set a multiyear high at $57.22 on May 13. The weekly chart remains positive but overbought with the five-week MMA at $53.27. My monthly value level is $53.98 with a semiannual risky level at $56.73.

Two companies reporting quarterly results pre-market on Friday: Abercrombie & Fitch ($54.41) set a 2013 high at $54.60 on May 20. The weekly chart profile remains positive with a close on Friday above the five-week MMA at $51.10. My monthly value level is $52.97 with a weekly pivot at $54.16 and annual risky level at $58.63.

Foot Locker ($36.59) set a 2013 high at $36.94 on May 17. The weekly chart profile is positive with the five-week MMA at $35.17. My monthly value level is $34.20 with a semiannual pivot at $36.28 and quarterly risky level at $39.26.



At the time of publication the author held no positions in any of the stocks mentioned.

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.

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