Retailers Post Mixed Earnings Scorecard

TheStreet.com

NEW YORK (TheStreet) -- Last week I profiled 18 retail-wholesale stocks in two posts, the front nine and the back nine. Today I provide a scorecard and updated buy-and-trade profiles.

There were more earnings beats (or birdies) than misses (or bogies) with 11 birdies and only three bogies. This round of earnings was thus eight under par, but stocks moving higher versus lower equaled at nine up and nine down through Tuesday's closes.

Among the 18 retail stocks only three are slightly undervalued. Among the 15 overvalued names, 11 are overvalued by double-digit percentages, seven are overvalued by more than 20%.

Two stocks were downgraded to hold from buy following their earnings reports.


The scorecard of past gains is quite good with 10 gaining more than 20% over the last 12 months, four by more than 50%. Despite 16 of 18 having buy ratings, the projected gains for the buy rated retailers is only 5.0% to 8.5% over the next 12 months. There is also risk of reversion to the mean with 16 of 18 trading above their 200-day simple moving averages (SMA).

Here are the post-earnings profiles for the 18 retail-wholesale stocks that reported last week:

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.

Scorecard for the front nine: American Eagle Outfitters ($19.95 vs. $20.05 on May 20) beat EPS estimates by a penny earning $0.18. The stock could not sustain gains above its 200-day SMA at $20.60. My quarterly value level is $18.70 with a weekly pivot at $20.18 and semiannual risky level at $23.16.

Autozone ($418.95 vs. $411.29 on May 20) beat EPS estimates by six cents earning $7.27. The stock set a new multi-year high at $435.35 on May 21. My semiannual value level is $409.61 and quarterly risky level at $436.58 that was nearly tested at the high.

Home Depot ($79.82 vs. $76.86 on May 20) beat EPS estimates by six cents earning 77 cents and set a new multi-year high at $81.56 on May 22. My quarterly value level is $68.76 with a weekly risky level at $80.41.

Lowes ($42.86 vs. $42.67 on May 20) missed EPS estimates by two cents earning 49 cents and set a new multi-year high at $43.84 on May 22. My quarterly value level is $33.45 with a weekly pivot at $42.69 with a monthly risky level at $43.82 that was tested at the high.

Saks ($15.46 vs. $11.85 on May 20) matched EPS estimates earning 19 cents and spiked to a multi-year high at $16.17 on May 22. As a result of this strength the stock was downgraded to hold from buy. My weekly value level is $13.59 with a semiannual pivot at $13.81.

Tech Data ($49.56 vs. $48.73 on May 20). I did not see the earnings report on this stock. My weekly value level is $48.30 with a quarterly risky level at $51.80.


Target ($69.51 vs. $71.06 on May 20) beat EPS estimates by 19 cents earning $1.05, but cautious guidance caused the stock to slump. My quarterly value level is $66.25 with a semiannual pivot at $70.31 and weekly risky level at $71.25. The stock traded as high at $71.91 on May 21 giving investors the opportunity to book profits before the price drop.

TJX Companies ($50.69 versus $51.33 on May 20) matched EPS estimates earning 62 cents. The stock stayed below its May 15 multi-year high at $51.84. My semiannual value level is $48.10 with a weekly risky level at $52.06.

Urban Outfitters ($41.10 vs. $44.54 on May 20) beat EPS estimates by three cents earning 32 cents, but the stock traded down to $41.32 on May 24. My annual value level is $37.28 with a weekly risky level at $44.72.

Scorecard for the back nine: Abercrombie & Fitch ($49.14 vs. $54.41 on May 21) missed EPS estimates by four cents with a loss of 9 cents and the stock fell to $47.94 on May 24. My quarterly value level is $38.05 with a weekly risky level at $53.83.

Buckle ($54.27 vs. $55.81 on May 21) missed EPS estimates by four cents earning 78 cents and after setting a new multi-year high at $57.22 on May 22 declined to $53.38 on May 23.. My quarterly value level is $46.90 with a weekly pivot at $54.15.

Dollar Tree ($50.56 vs. $49.47 on May 21) beat EPS estimates by two cents earning 59 cents and the stock traded between $48.08 and $51.20 on May 23. My weekly value level is $48.99 with a semiannual pivot at $50.27 and quarterly risky level at $60.95.


Foot Locker ($34.10 vs. $36.59 on May 21) beat EPS estimates by three cents earning 91 cents, but the stock declined to $32.61 on May 24 on a weak guidance. My semiannual value level is $25.66 with a weekly risky level at $34.57.

Gap ($40.52 vs. $41.06 on May 21) beat EPS estimates by two cents earning 71 cents, but the stock slipped to $40.09 on May 24 after setting a new multi-year high at $41.86 on May 21. My semiannual value level is $32.17 with a weekly risky level at $42.68.

Limited Brands ($49.84 vs. $51.81 on May 21) beat EPS estimates by two cents and the stock slipped to $49.62 on May 24 after testing $52.32 on May 22. My semiannual value level is $41.47 with a quarterly risky level at $54.56.

PetSmart ($69.48 vs. $69.33 on May 21) beat EPS estimates by two cents earning 98 cents and the stock slipped from a new 2013 high at $71.05 on May 23 to $69.10 on May 24. My semiannual value level is $62.22 with a weekly risky level at $73.45.

Ross Stores ($66.23 vs. $65.12 on May 21) matched EPS estimates earning $1.07 and the stock traded sideways. My quarterly value level is $54.84 with a weekly risky level at $68.45.


Williams Sonoma ($55.74 vs. $55.59 on May 21) beat EPS estimates by four cents earning 40 cents and the stock traded sideways. My quarterly value level is $41.50 with a weekly risky level at $56.21.

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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