Before I drill down into the guts of these profiles let's update the profiles for the four "too big to fail" money center banks. On Thursday I wrote, Earnings From 'Too Big to Fail' Banks Key Rallyand on Friday JP Morgan Chase and Wells Fargo beat EPS estimates but not on revenue. These hold rated money center banks moved sideways to down since then.
On Monday pre-market Citigroup beat EPS estimates and on the revenue line. Citi remains buy rated stock traded up to $46.29 Monday morning, but remains below its March 11 high at $47.92. At the beginning of the year the PHLX KBW Banking Index included four banks rated strong buy and another 14 rated buy. Today the only buy rated member of that index is Citigroup. Hold rated Bank of America reports pre-market on Wednesday.
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.
The six companies I cover today represent five overvalued sectors.
Companies reporting after the close on Wednesday:
American Express ($64.10) is a hold rated stock in the finance sector, which is 15.2% overvalued. American Express set a multi-year high at $67.75 on April 1. The weekly chart profile shifts to neutral with a close this week below its five-week modified moving average at $64.50 as momentum is projected to remain overbought. My monthly value level is $62.38 with a quarterly risky level at $67.93.
eBay ($55.84) is a buy rated stock in the retail-wholesale sector which is 17.1% overvalued. The stock set a multi-year high at $58.04 last Thursday. The weekly chart profile is positive with the five-week MMA at $54.95. My quarterly value level is $53.14 with a monthly risky level at $59.49.
Companies reporting pre-market on Thursday:
Pepsico ($78.92) is a buy rated stock in the consumer staples sector which is 17% overvalued. Pepsico set a multi-year high at $80.48 last Thursday. The weekly chart profile is positive with extremely overbought momentum and the five-week MMA at $77.65. My annual value level is $77.05 with an annual pivot at $79.02 and weekly risky level at $82.33.
UnitedHealth Group ($61.59) is a recent downgrade to hold from buy in the medical sector that's 9.5% overvalued. The stock set a multi-year high at $63.95 on April 2. The weekly chart is positive with the five-week MMA at $58.62. My semiannual value level is $59.89 with a quarterly risky level at $63.66, which was tested at that April 2 high, then came the downgrade.
Union Pacific ($135.76) is a hold rated stock in the transportation sector which is 18.5% overvalued and considered an "avoid-source of funds" as 78% of all stocks in this sector are rated strong sell or sell. The stock set a multi-year high at $143.00 on March 28. The weekly chart profile shifts to negative on a close this week below the five-week MMA at $138.14. My quarterly value level is $134.57 with a monthly pivot at $136.29 and weekly risky level at $142.19, and quarterly risky level at $143.14.
Verizon Communications ($50.64) is a buy rated stock in the utilities sector which is 10.8% overvalued. The stock traded to a new multi-year high at $51.05 as stocks declined on Monday. The weekly chart profile is positive but extremely overbought with the five-week MMA at $48.69. My quarterly value level is $46.78 with a weekly risky level at $52.83.
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.