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
There are 13 hold-rated stocks in the Dow and two sell-rated names; Caterpillar
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
Three companies reporting quarterly results pre-market on Thursday: Buckle
Two companies reporting quarterly results after the close on Thursday: Gap
Two companies reporting quarterly results pre-market on Friday: Abercrombie & Fitch
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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