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Steve Hach is the Senior Editor at ValuEngine.com, a Melbourne, Florida-based stock valuation and forecast service. ValuEngine utilizes Ivy League financial research as the basis for its coverage of more than 8000 US, Canadian, and other foreign stocks. Hach utilizes ValuEngine's complex... More
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  • Valuations Dip On Chinese Pull Back

    VALUATION WATCH: Overvalued stocks now make up 49.77% of our stocks assigned a valuation and 17.67% of those equities are calculated to be overvalued by 20% or more. Ten sectors are calculated to be overvalued--with two at or near double digits.

    Return to "Normalcy"?
    Valuations Dip On Chinese Pull Back

    ValuEngine tracks more than 7000 US equities, ADRs, and foreign stock which trade on US exchanges as well as @1000 Canadian equities. When EPS estimates are available for a given equity, our model calculates a level of mispricing or valuation percentage for that equity based on earnings estimates and what the stock should be worth if the market were totally rational and efficient--an academic exercise to be sure, but one which allows for useful comparisons between equities, sectors, and industries. Using our Valuation Model, we can currently assign a VE valuation calculation to more than 2800 stocks in our US Universe.

    We combine all of the equities with a valuation calculation to track market valuation figures and use them as a metric for making calls about the overall state of the market. Two factors can lower these figures-- a market pullback, or a significant rise in EPS estimates. Vice-versa, a significant rally or reduction in EPS can raise the figure. Whenever we see overvaluation levels in excess of @ 65% for the overall universe and/or 27% for the overvalued by 20% or more categories, we issue a valuation warning.

    We now calculate that 49.77% of stocks are overvalued and 17.67% of those stocks are overvalued by 20% or more. These figures have been decreasing over the summer as the market has been volatile and subjected to some battering from events in the Eurozone, Greece, and--now--China. We have also seen a big hit for oil prices and Apple shares (whose stock price can have a disproportionate effect on key indices.)

    We did our last valuation study on June 25th, and with many stocks putting in some of that "Sell In May and Go Away" price action, valuation levels have declined significantly from levels in excess of 68% or so on June 24th to the current "normal" range of @50%. We saw figures as low as 46% earlier this month, and you would have to go all the way back to early February--with the S&P 500 trading at 2020-- to find stocks that cheap.

    As always, the key part of the puzzle for US equity prices remains the Fed and how they will end the era of quantitative easing. "September" has been the response for quite some time now, but events keep interfering with the best efforts of US central bankers to get back to a "normal" interest rate environment.

    China's long-demanded (be careful what you wish for!) currency devaluation and their market pull back has sent shock waves throughout the global financial system. This hurts stock prices in the US, but--paradoxically, it helps bolster than too as it becomes difficult to imagine the Fed making any move higher rates in a period of global uncertainty.

    Meanwhile, the domestic economic picture remains solid. Good news on the employment front, some indication of wage pressures, signs of a pop in housing?, lower oil prices, and--now--the possibility of cheaper Chinese goods thanks to the currency devaluation.

    That should go a long way in assuaging fears of inflation on teh part of the Fed--and again lowers the possibility of some rapid rate-rise in the Fall. As long as they fulfill their promise to pay attention to BOTH sides of their mandate--manage inflation AND promote full employment, they should be able to keep their foot on the pedal for a while longer.

    And again, US equities remain standing as the last bastion of decent yield for scared investors the world over. As we have been saying for a while now, we remain confident that the underlying US economy is strong-- and getting stronger. However, we live in an interconnected world and China has a cold. Therefore we remain convinced that the Fed will raise rates later rather than sooner, and US stocks should benefit from this environment as long as the crises in other areas don't become unmanageable.

    The chart below tracks the valuation metrics from January 2015. It shows levels in excess of 40%.

    (click to enlarge)

    This chart shows overall universe over valuation in excess of 40% vs the S&P 500 from January 2013

    This chart shows overall universe under and over valuation in excess of 40% vs the S&P 500 from March 2007*

    (click to enlarge)

    *NOTE: Time Scale Compressed Prior to 2011.

    ValuEngine.com is an independent research provider, producing buy/hold/sell recommendations, target price, and valuations on over 7,000 US and Canadian equities every trading day.
    Visit our website for more information and a free trial.

    Aug 19 10:13 AM | Link | Comment!
  • Top Utilities Stocks Ranked And Rated

    VALUATION WATCH: Overvalued stocks now make up 47.99% of our stocks assigned a valuation and 16.72% of those equities are calculated to be overvalued by 20% or more. Nine sectors are calculated to be overvalued--with two at or near double digits.

    ValuEngine Index Overview

     

     

     

     

     

    IndexWeek OpenFriday PMChange% ChangeYTD
    DJIA17375.1817445.670.420.41%-2.12%
    NASDAQ5081.725026.47-55.25-1.09%6.34%
    RUSSELL 20001212.421204.59-7.83-0.65%-0.01%
    S&P 5002080.982085.664.680.22%1.30%

     

    ValuEngine Market Overview

     

     


     

    Summary of VE Stock Universe
    Stocks Undervalued52.01%
    Stocks Overvalued47.99%
    Stocks Undervalued by 20%20.83%
    Stocks Overvalued by 20%16.72%
    ValuEngine Sector Overview

     
















    SectorChangeMTDYTDValuationLast 12-MReturnP/E Ratio
    Aerospace0.37%-1.73%3.02%12.11% overvalued-0.83%20.75
    Medical-0.04%-2.71%12.65%11.42% overvalued13.46%31.23
    Consumer Staples-0.18%-2.06%-0.31%7.18% overvalued-0.25%23.18
    Business Services-0.39%-1.82%4.19%6.20% overvalued-1.48%24.14
    Retail-Wholesale-0.10%-2.07%-2.79%2.96% overvalued5.98%25.12
    Consumer Discretionary0.08%-1.08%5.66%2.59% overvalued-0.15%27.74
    Finance-0.04%-1.16%1.02%1.47% overvalued-0.78%17.37
    Computer and Technology-0.43%-1.55%-1.40%0.63% overvalued-2.40%29.02
    Multi-Sector Conglomerates-0.03%-2.94%-4.24%0.51% overvalued-7.82%22.79
    Utilities-0.24%-1.68%-5.05%0.16% undervalued-4.95%21.22
    Construction0.09%-0.44%1.85%3.75% undervalued1.41%23.94
    Industrial Products-0.42%-1.82%-3.13%4.44% undervalued-8.43%19.12
    Auto-Tires-Trucks-0.21%-1.50%-2.10%5.68% undervalued-9.34%15.49
    Transportation-0.80%-3.17%-6.04%6.12% undervalued-7.24%16.99
    Basic Materials-1.36%0.32%-11.66%14.47% undervalued-34.13%21.65
    Oils-Energy-2.20%-3.85%-14.96%14.56% undervalued-45.90%23.24

     

    Sector Talk--Utilities

    Below, we present the latest data on Utilities stocks from our Professional Stock Analysis Service Top five lists are provided for each category. We applied some basic liquidity criteria--share price greater than $3 and average daily volume in excess of 100k shares.

    Top-Five Utilities Stocks--Short-Term Forecast Returns

     

     

     

     

     

     

    TickerNameMkt PriceValuation(%)Last 12-M Retn(%)
    PCGPG&E CORP53.368.49%21.08%
    FEFIRSTENERGY CP34.45-8.29%6.29%
    PEGPUBLIC SV ENTRP42.316.53%19.96%
    BIPBROOKFIELD INFR42-2.84%5.03%
    IDAIDACORP INC63.33-1.01%17.54%

    Top-Five Utilities Stocks--Long-Term Forecast Returns

     

     

     

     

     

     

    TickerNameMkt PriceValuation(%)Last 12-M Retn(%)
    PCGPG&E CORP53.368.49%21.08%
    FEFIRSTENERGY CP34.45-8.29%6.29%
    PEGPUBLIC SV ENTRP42.316.53%19.96%
    BIPBROOKFIELD INFR42-2.84%5.03%
    IDAIDACORP INC63.33-1.01%17.54%

    Top-Five Utilities Stocks--Composite Score

     

     

     

     

     

     

    TickerNameMkt PriceValuation(%)Last 12-M Retn(%)
    FEFIRSTENERGY CP34.45-8.29%6.29%
    VZVERIZON COMM47.66-9.23%-2.58%
    PCGPG&E CORP53.368.49%21.08%
    BIPBROOKFIELD INFR42-2.84%5.03%
    PEGPUBLIC SV ENTRP42.316.53%19.96%

    Top-Five Utilities Stocks--Most Overvalued

     

     

     

     

     

     

    TickerNameMkt PriceValuation(%)Last 12-M Retn(%)
    VGVONAGE HOLDINGS6.272.21%83.98%
    FTRFRONTIER COMMUN5.3541.56%-17.69%
    VIVHYVIVENDI-ADR25.8621.79%1.25%
    POMPEPCO HLDGS27.2721.78%1.15%
    TETECO ENERGY22.2619.76%28.67%

    Find out what Wall Street Investment and Media Professionals already know,
    ValuEngine offers sophisticated stock valuation and forecast research as well as a variety of portfolio screening and creation tools.

    Tags: PCG, FE, PEG, BIP, IDA, VZ, VG, FTR, VIVHY, POM, TEF, utilities
    Aug 17 10:56 AM | Link | Comment!
  • ValuEngine Top-Five Upgraded STRONG BUY Stocks For The Day

    VALUATION WATCH: Overvalued stocks now make up 46.21% of our stocks assigned a valuation and 15.97% of those equities are calculated to be overvalued by 20% or more. Eight sectors are calculated to be overvalued--with two at-or-near double digits.

    Top Stocks

    --ValuEngine Top-Five Upgraded STRONG BUY Stocks for the Day

    ValuEngine tracks more than 7000 US equities, ADRs, and foreign stock which trade on US exchanges as well as @1000 Canadian equities. When EPS estimates are available for a given equity, our model calculates a level of mispricing or valuation percentage for that equity based on earnings estimates and what the stock should be worth if the market were totally rational and efficient--an academic exercise to be sure, but one which allows for useful comparisons between equities, sectors, and industries. Using our Valuation Model, we can currently assign a VE valuation calculation to more than 2800 stocks in our US Universe.

    We also use trading data to provide forecast estimates for a variety of time horizons for almost ever equity in our database. Our Buy/Sell/Hold recommendations are based upon the 1-year forecast return figure. Using valuation and forecast figures, you can rank and rate our covered stocks against each other, to find out, in an objective and systematic way, the most attractive investment targets based on your own risk/reward parameters. We re-calculate the entire database every trading day, so you are assured that every proprietary valuation and forecast datapoint is as up-to-date as possible.

    Below, we present the latest top-five list of upgraded stocks from our models. They are presented in alphabetical order. Bank of Yokohama is the top pick here.. These stocks represent STRONG BUY stocks. Members can always screen for these stocks using our advanced screening page HERE or our 5-Engine Stock page HERE.

    Here are the top-five STRONG BUY upgrades for the day:

    TickerCompany NameMarket PriceValuationLast 12-M Return1-M Forecast Return1-Yr Forecast ReturnP/E RatioSector Name
    AXAHYAXA SA -SP ADR27.13N/A13.70%1.06%12.79%10.6184Finance
    BKJAYBANK YOKOHAMA26.6N/A21.74%1.11%13.32%N/AFinance
    HLFHERBALIFE LTD59.687.53%15.91%1.05%12.60%11.65625Retail-Wholesale
    NPTNNEOPHOTONICS CP5.76-27.21%118.18%1.10%13.23%16.61539Computer and Technology
    UHALAMERCO INC367.41N/A39.70%1.03%12.43%15.31354Transportation

    Below is today's data on BKJAY:

    The Bank of Yokohama, Ltd. (OTCPK:BKJAY) provides banking and related products and services to individual and corporate clients primarily in Kanagawa Prefecture and southwestern Tokyo in Japan. It offers various deposit products; housing and consumer loans; investment trust products; and personal annuity insurance and whole life insurance products.

    VALUENGINE RECOMMENDATION: ValuEngine updated its recommendation from BUY to STRONG BUY for BANK YOKOHAMA on 2015-08-07. Based on the information we have gathered and our resulting research, we feel that BANK YOKOHAMA has the probability to OUTPERFORM average market performance for the next year. The company exhibits ATTRACTIVE Company Size and Momentum.

    ValuEngine Forecast
     Target
    Price*
    Expected
    Return
    1-Month26.901.12%
    3-Month26.931.23%
    6-Month27.162.11%
    1-Year30.1813.44%
    2-Year26.800.75%
    3-Year20.97-21.17%

    Valuation & Rankings
    Valuationn/aValuation Rank(?) n/a
    1-M Forecast Return1.12%1-M Forecast Return Rank 99
    12-M Return21.96%Momentum Rank(?) 82
    Sharpe Ratio0.29Sharpe Ratio Rank(?) 69
    5-Y Avg Annual Return6.38%5-Y Avg Annual Rtn Rank 66
    Volatility21.79%Volatility Rank(?) 71
    Expected EPS Growthn/aEPSGrowth Rank(?) n/a
    Market Cap (billions)8.59Size Rank 89
    Trailing P/E Ration/aTrailing P/E Rank(?) n/a
    Forward P/E Ration/aForward P/E Ratio Rank n/a
    PEG Ration/aPEG Ratio Rank n/a
    Price/Salesn/aPrice/Sales Rank(?) n/a
    Market/Bookn/aMarket/Book Rank(?) n/a
    Beta0.58Beta Rank 63
    Alpha0.06Alpha Rank 75

    ValuEngine.com is an independent research provider, producing buy/hold/sell recommendations, target price, and valuations on over 7,000 US and Canadian equities every trading day.
    Visit our website for more information and a free trial.

    Aug 10 4:18 PM | Link | Comment!
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