Upgrades and Downgrades from the Woodshed

TheStreet.com

NEW YORK ( TheStreet) -- When a stock gets a serious one-day price cut due to a company-specific event, such as an earnings miss or lowered guidance, I say that the stock has been sent to the woodshed.

At times, even a buy-rated stock enters woodshed status, and if the reason does not cause a downgrade, investors need to know a value level at which to "catch that falling knife."

Since Feb. 7, I've profiled 35 stocks that were hit hard on adverse news. Today, I profile the 14 stocks that have been upgraded or downgraded since being chopped behind the woodshed.

On Feb. 7, I wrote Nine Stocks Take Trip to the Woodshed. Four of these stocks have been downgraded since this post.


On Feb. 13, I profiled Seven Stocks Go to the Woodshed While Apple Fills Gap. Two of these stocks have been upgraded and three have been downgraded since this post.

On Feb. 20, I wrote Woodshed Stocks Face Another Valuation Warning. One of these stocks has been upgraded since this post.

March 4 was the last time I talked about the woodshed, in Apple Joins Others Behind the Woodshed. Two of these have been upgraded and two have been downgraded. One of the downgraded stocks has been upgraded to buy this morning.


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Reading the Table

OV / UN Valued: The 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 twelve 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 twelve months. Stocks with a Black number in the Table are projected to move higher by that percentage over the next twelve months.

Value Level is the 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 is the price at which to enter a GTC Limit Order to sell on strength.

Woodshed stocks profiled on Feb. 7, 2013:

CH Robinson Worldwide ($59.15 vs. $60.50 on Feb. 7) has been downgraded to sell from hold and is thus a source of funds. CHRW has a negative weekly chart profile with the five-week modified moving average (MMA) at $59.34 and the 200-week SMA at $64.01. My quarterly value level is $53.20 with an annual risky level at $60.96.

Constellation Brands ($47.41 vs. $31.37 on Feb. 7) has been downgraded to hold from buy and thus positions should be reduced on strength. STZ has a positive but overbought weekly chart profile with the five-week MMA at $43.41. My monthly value level is $44.26 with a weekly pivot at $45.64 and monthly risky level at $48.21.

Time Warner Cable ($96.01 vs. $88.09 on Feb. 7) has been downgraded to hold from buy and thus positions should be reduced on strength. TWC has a positive weekly chart profile with the five-week MMA at $92.87. My semiannual value level is $92.08 with a quarterly pivot at $95.89 and monthly risky level at $100.60.

Yum! Brands ($71.32 vs. $62.93 on Feb. 7) has been downgraded to hold from buy and thus positions should be reduced on strength. YUM has a positive weekly chart profile with the five-week MMA at $68.15. My monthly value level is $67.67 with a weekly pivot at $69.41 and semiannual risky level at $72.47.

Woodshed stocks profiled on Feb. 13, 2013:

Akamai Technologies ($35.16 vs. $36.74 Feb. 13) has been upgraded to buy from hold, which makes the stock a buy-and-trade candidate. AKAM has a negative weekly chart profile with the stock between its 200-week SMA at $33.82 and its five-week MMA at $36.46. My weekly value level is $32.21 with a monthly risky level at $44.05.

Ann ($28.99 vs. $28.44 on Feb. 13) has been downgraded to hold from buy and thus positions should be reduced on strength. ANN has a negative weekly chart profile with the 200-week SMA at $23.48 with the five-week MMA at $30.02. My weekly value level is $27.16 with an annual pivot at $30.07 and quarterly risky level at $30.91.

Nuance Communications ($20.11 vs. $18.91 on Feb. 13) has been downgraded to hold from buy and thus positions should be reduced on strength. NUAN has a neutral weekly chart profile with the five-week MMA and 200-week SMA at $19.93 and $19.37. My weekly value level is $15.84 with a monthly pivot is $19.91 and my semiannual risky level at $20.75.

Riverbed Technology ($14.91 vs. $16.12 on Feb. 13) has been upgraded to buy from hold and thus has become a buy-and-trade candidate. RVBD has an oversold weekly chart profile with the five-week MMA at $15.93. My weekly value level is $11.66 with a quarterly pivot at $15.42 and monthly risky level at $20.95.

Valspar ($62.03 vs. $61.94 on Feb. 13) has been downgraded to sell from buy becoming a source of funds. VAL has a negative weekly chart profile with the five-week MMA at $63.31. My quarterly value level is $60.41 with a semiannual pivot at $63.37 and monthly risky level at $65.37.

Woodshed stocks profiled on Feb. 20, 2013:

Rackspace ($49.74 vs. $57.74 on Feb. 20) has been upgraded to buy from hold making the stock a buy-and-trade candidate. The weekly chart profile is negative with the five-week MMA at $57.28. My weekly value level is $38.65 with a quarterly risky level at $75.06.

Woodshed stocks profiled on March 4, 2013:

Foster Wheeler ($22.67 vs. $20.22 on March 4) has been downgraded to hold from buy so positions in this stock should be reduced on strength. FWLT has a negative weekly chart profile with the stock below its five-week MMA and 200-week SMA at $23.10 and $25.89. My weekly value level is $20.32 with a semiannual risky level at $26.44.

Garmin ($32.97 vs. $35.14 on March 4) has been upgraded to buy from hold making the stock a buy-and-trade candidate. GRMN has an oversold weekly chart profile with the five-week MMA and 200-week SMA at $35.44 and $35.08. My weekly value level is $32.90 with a monthly risky level at $38.37.

JC Penney ($14.89 vs. $17.69 on March 4) has been upgraded to strong buy from hold making the stock a buy-and-trade candidate. JCP has a negative weekly chart profile with the five-week MMA at $17.03. The March 2009 low is $13.71 with a weekly pivot at $16.33 with a semiannual risky level at $17.38.

Verifone Systems ($20.36 vs. $19.05 on March 4) had been downgraded to hold from buy than upgraded this morning back to buy making the stock a buy-and-trade candidate. PAY has a negative weekly chart profile with the five-week MMA at $23.65. My weekly value level is $13.94 with a monthly risky level at $24.97.

At the time of publication, the author had no positions in the stocks mentioned.

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

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