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"The market is doing what it loves to do.” Lately, that means it is both fundamentally and technically very fickle. What the investor often forgets is that what appears to be a fact, in reality, is very creative fiction. The fictional stories being told by Wall Street and the media are so compelling that the average investor takes the hook every time. That’s a 'fact' and, for me, it is a very sad way of doing business; that is, not to help investors prosper.

The selection of these five companies is based on the following supportive data, my three disciplines and both their short and longer-term performance. I expect these companies to do poorly in the coming months. However, we just may have to wait a while before taking positions. Those ‘disciplines’ are my weighted fundamental, technical and consensus analysis. These companies are rated and compared below with brief comments.

Earnings estimates on balance for these companies are definitely not positive for the near-term. However, you might remember that how the street will reward or punish any company in the future is always questionable.

My analysis, to a large degree, has to do with comparative analytics. Comparing these five companies with their peers and other bottom/growth/revenue producing companies, in general, is what I believe makes or loses you money, both near and long-term.

The question, as always, is: can you afford the risk/reward ratio, and how is your insight for making timely investments? These companies are definitely doing well in this current rally.

In the table below you will see why my approach of valuation offers five very weak companies that I believe can be profitable in the intermediate-term, however, not necessarily now. Remember to be a bit patient before taking positions.

Valuation Analytics Table

Stock and Symbol

Approx. Current Price

My Target Price % Above (+) / Below (-) Current Price – Valuation is “Tweaked.”

One Year Projections are from the next - - Bearish Inflection Point.

PEG

P/E

Forward P/E

Valuation Divergence (%)

One - Year Projected from a Mean – Sigma and from the next - - Bearish Inflection Point.

1. Boyd Gaming, (NYSE:BYD)

12.4

Minus 25% to 40%

100.1

65.4

310

-100+%

Comments: Obviously, this is a very poor Valuation and Target Price Projection. When you do further fundamental studies it looks even worse. Add to that the Technical and Consensus Analysis, and you have a conformation that BYD is and remains a loser. This is why it is wise to compare - frequently. My work / analytics are for you possibly taking positions at a future date. However, investing at this time may not be wise.

2. ITT Ed. (EST)

65.6

Minus 15% to 30%

0.98

5.87

8.0

-36%

Comments: Obviously, this is a very poor Valuation and Target Price Projection. When you do further fundamental studies it looks even worse. Add to that the Technical and Consensus Analysis, and you have a conformation that EST is and remains a loser. This is why it is wise to compare - frequently. My work / analytics are for you possibly taking positions at a future date. However, investing at this time may not be wise.

3. Excel Maritime, (NYSE:EXM)

4.8

Minus 25% to 40%

2.24

1.44

26.9

-100+%

Comments: Obviously, this is a very poor Valuation and Target Price Projection. When you do further fundamental studies it looks even worse. Add to that the Technical and Consensus Analysis, and you have a conformation that EXM is and remains a loser. This is why it is wise to compare - frequently. My work / analytics are for you possibly taking positions at a future date. However, investing at this time may not be wise.

4. Valassus Comm. (NYSE:VCI)

32.6

Minus 25% to 40%

0.94

4.35

11.4

-100+%

Comments: Obviously, this is a very poor Valuation and Target Price Projection. When you do further fundamental studies it looks even worse. Add to that the Technical and Consensus Analysis, and you have a conformation that VCI is and remains a loser. This is why it is wise to compare - frequently. My work / analytics are for you possibly taking positions at a future date. However, investing at this time may not be wise.

5. Wetseal, (WTSLA)

3.7

Minus 25% to 40%

0.79

4.37

18,5

-100+%

Comments: Obviously, this is a very poor Valuation and Target Price Projection. When you do further fundamental studies it looks even worse. Add to that the Technical and Consensus Analysis, and you have a conformation that WTSLA is and remains a loser. This is why it is wise to compare - frequently. My work / analytics are for you possibly taking positions at a future date. However, investing at this time may not be wise.

Summary:

These five companies are excellent examples of what can happen if management loses control.

BYD: Rating: Fundamental: Very Poor, Technical: Good, Consensus: Very Poor.

EST: Rating: Fundamental: Very Poor, Technical: Good, Consensus: Good.

EXM: Rating: Fundamental: Very Poor, Technical: Good, Consensus: Average.

VCI: Rating: Fundamental: Very Poor, Technical: Good, Consensus: Average.

WTSLA: Rating: Fundamental: Very Poor, Technical: Good, Consensus: Average.

The general market is currently over-valued and over-bought with overly aggressive investors and interest rates on the rise. It is showing signs of deteriorations, especially in the area of breadth. This means that you must consider holding cash or perhaps taking bearish positions.

My focus is “investing wisely”, e.g. taking advantage of the bull / bear cycles as they occur within the overall marketplace. Integrating modern fundamental analytics within these technical cycles means maintaining a process of the thorough and ongoing analysis of many companies, sectors and industry groups. I believe this is a vital discipline in investing wisely.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Source: Five Services Companies With Severe Bearish Valuations