Last week I profiled 18 buy rated retailers in the retail-wholesale sector in two posts. A week ago on May 20 I wrote Home Depot, Lowes, Target Top Earnings List and I called these the front nine. Then on May 21 I wrote Buckle Up for More Retail Earnings covering what I called the back nine.
Tomorrow I will update my profiles for these 18 names focusing on naming the winners and losers. I will note today that two were downgraded to hold from buy according to ValuEngine.
In golf terms on the front nine there were five that beat EPS estimates or birdies, two that matched or pars, one that missed or a bogey, and one that did not report. Four under par is an excellent score.
On the back nine there were six that beat EPS estimates or birdies, one that matched for a par, and two that missed or bogies. Four under par was another excellent score.
As you will see in tomorrow's earnings scorecard for these 18 retail-wholesale stocks that despite mostly better than expected earnings, five moved sideways with the same dollar handle, eight traded lower, and only five traded higher mostly due to cautious comments,
Among the six retailers reporting this week that I am profiling four have buy ratings and two have hold ratings in a market where 70.7% of all stocks are overvalued, 32.9% overvalued by 20% or more. The consumer discretionary sector is 18.5% overvalued and the retail-wholesale sector is the most overvalued sector by 24.2%.
Four of today's profiled retailers are overvalued by double-digit percentages and three have gained more than 30% over the last 12 months. The projected gains for the next 12 months show a maximum of just 7.0%. Four out of six have 12 month trailing P/E ratios above 24.0. Five of the six stocks are above its 200-day simple moving average (SMA) which reflects the risk of reversions to the mean.
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.
Reporting pre-market on Tuesday is Tiffany ($76.21) set a 52-week high at $79.35 on May 22. The weekly chart profile is positive but overbought with the five-week modified moving average (MMA) at $73.87. My monthly value level is $69.43 with a weekly risky level at $79.03.
Reporting pre-market on Wednesday, Michael Kors ($60.09) is below its Feb. 19 high at $65.10. The weekly chart stays positive given a weekly close above the five-week MMA at $58.28. My weekly value level is $58.63 with a monthly risky level at $68.74.
Reporting pre-market on Wednesday, Fresh Market ($46.10) is below its 200-day SMA at $50.54. The weekly chart profile stays with a close this week above its five-week MMA at $43.61. My weekly value level is $42.82 with a quarterly risky level at $53.79.
Reporting pre-market on Thursday, Costco ($114.39) set a multi-year high at $114.72 on May 22. The weekly chart remains positive but overbought with the five-week MMA at $109.39. My monthly value level is $108.32 with a quarterly pivot at $114.15.
Reporting pre-market on Thursday, Express ($19.20) set its 2013 high at $19.69 on May 22. The weekly chart profile stays positive with the five-week MMA at $18.53. My quarterly value level is $18.40 with a weekly pivot at $19.32 and quarterly risky level at $19.52.
Reporting pre-market on Thursday, Freds ($15.25) set a 2013 at $15.69 on May 17. The weekly chart remains positive but overbought with the five-week MMA at $14.59. My semiannual value level is $14.54 with a weekly pivot at $15.46 and semiannual risky level at $15.59.
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.