Stocks remain fundamentally overvalued and under a ValuEngine valuation warning with 76.8% of all stocks overvalued, 43.4% by 20% or move. The retail-wholesale sector is 23.6% overvalued with the consumer staples sector 15.6% overvalued, and the transportation sector is 24.6% overvalued.
On Friday we learned that the University of Michigan consumer sentiment index declined to a preliminary reading for September at 76.8, the lowest score since April and well below the August final reading at 82.1. Consumer sentiment continues to stay below the neutral zone for this data at 90 to 110.
One of the six stocks previewed today is undervalued and two of the other five are overvalued by more than 20%. One stock is down 11.8% over the last 12 months, while four have gained between 18.7% and 58.1%. Four of the six are trading above their 200-day SMAs, which reflects the risk of reversion 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.
The provider of prepared meals, condiments, sides, snacks and desserts under brand names such as Chef Boyardee, Healthy Choice and Peter Pan, Conagra Foods ($31.88) broke below its 200-day SMA at $33.92 on Sept. 10 to a low at $30.64. This weakness followed the setting of a multi-year high at $37.28 on Aug. 5. My annual value level is $21.18 with a weekly pivot at $32.22 and quarterly risky level at $33.21.
The country-style eatery and general store you find off major exits on the interstate highways Cracker Barrel ($104.64) set a multi-year high at $104.98 Friday. My weekly value level is $101.53 with a monthly risky level $109.64.
The owner of Red Lobster, Olive Garden, Longhorn Steakhouse and The Capital Grille, Darden Restaurants ($48.37) set a 2013 high at $55.25 on June 10 then traded as low as $45.71 on Sept. 3. My weekly value level is $46.89 with a quarterly pivot at $48.81 and annual risky level at $50.52.
Packaged delivery company FedEx ($107.24) set a multi-year high at $113.34 on Aug. 26 then ended last week just above its 50-day simple moving average at $107.15. My semiannual value level is $105.29 with a weekly pivot at $107.82 and monthly risky level at $111.55.
The maker of breakfast cereals, yogurt, soups, frozen vegetables and other food products General Mills ($49.25) set a multi-year high at $53.07 on Aug. 1 then declined to $48.25 on Aug. 29. My quarterly value level is $48.01 with a weekly pivot at $48.87 and annual risky level at $50.81, which was tested at the high.
The distributor of technology products located in Tampa Bay, Fla., Tech Data ($49.72) set a second half 2013 high at $54.07 on Aug. 14 then traded as low as $48.71 on Aug. 27. My quarterly value level is $45.69 with a weekly pivot at $51.47 and monthly risky level at $52.96.
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.