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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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  • Apple Announces Latest Updates And Changes

    VALUATION WATCH: Overvalued stocks now make up 62.79% of our stocks assigned a valuation and 25.44% of those equities are calculated to be overvalued by 20% or more. ALL sectors are calculated to be overvalued--with eight at or near double digits.

    --Yet Another Bite... Apple Announces Latest Updates and Changes

    Apple Inc. (NASDAQ:AAPL) is engaged in designing, manufacturing and marketing mobile communication and media devices, personal computers, and portable digital music players. The Company's products and services include iPhone, iPad, Mac, iPod, Apple TV, a portfolio of consumer and professional software applications, the iOS and Mac OS X operating systems, iCloud, and a range of accessory, service and support offerings. It sells its products worldwide through its online stores, its retail stores, its direct sales force, third-party wholesalers, and resellers. Apple Inc. is headquartered in Cupertino, California.

    June is the time for the annual Apple Worldwide Developers Conference (WWDC). Held in San Francisco, this event allows the company to present key updates and changes to Apple operating systems, apps, computers, phones, tablets, and other aspects of its business to the media and the programmers who provide additional software for the tech juggernaut.

    This year's WWDC started Monday, and will run for the rest of the week. So far, the company has announced major updates and changes to both its computer and mobile operating systems. For the laptops and desktops, OSX will see a new iteration, OS X 10.11 "El Capitan." For those iPhones and iPads, iOS 9 will be released. It does not appear that these will be major upgrades, rather some additional features will be added, multi-tasking tweaked, Siri will be improved, etc. In addition, the latest Apple 'must have," the Apple Watch, will get an operating system update as well.

    Perhaps the biggest news from WWDC so far is the announcement that the company will create its own streaming music service to be run from iTunes, "Apple Music." This wasn't much of a surprise, as the company has been positioning itself for this circumstance for years, and it was a major reason for the $3 billion deal to purchase Beats back in May, 2014. The new streaming service will launch at the end of this month and cost $9.99. Initially it will run on Apple systems only. Android users will have to wait until the Fall to use the service.

    Perhaps what is most notable here--and what many analysts are discussing, is the genuine lack of a "WOW" factor. Apple has long been masterful at providing truly innovative products that simply cannot be ignored by its legions of "fanboys" and "fangirls." Basically on life support until the return of Steve Jobs and the creation of the iPod, iPhone, and iPad, Apple had products that were simply better than the rest with powerful, intuitive user interfaces that could not be matched.

    However, the recent WWDC has left many wanting more. We don't see innovation here, we see imitation. Imitation of competitors reminiscent of --GASP--Microsoft. Except Apple is actually imitating Microsoft with some of its tweaks--like the changes made to iPads to allow app "splitting" which first appeared in Windows 8.

    Or, the latest tweaks to the much-maligned Apple Maps app, which now feature integration for public transportation routes which has been available to Google Maps users for years? And the new "Proactive" feature for the iPhone which tailors phone content to the user in the same way Google's "Now" has also been doing for years?

    Reporters and analysts are discussing many of the latest WWDC announcements in reference to other, existing applications, features, and competitors whereas everything used to be starting from the brain of Jobs and his highly-creative Cupertino team of developers and designers.

    Of course, only time will tell if this is a problem, if Apple is faltering, or if the rest of the world has just caught up. It does not appear that users are any less enthusiastic for anything Apple. The initial Apple Watch sales data has been impressive--despite the typical hiccups with both hardware and software featured in the product. And, there have been reports that demand is outstripping supply.

    Critics have been predicting the company's downfall for decades. But since the devilish inter day S&P 500 low of 666 on March 9, 2009, the stock is up @1000%. Now the most oft-cited issue is that the company is so big that similar growth cannot continue at the same pace. It's just a tech behemoth awash in cash and would have to consume so much of the rest of the competitive universe that it simply cannot go on the same way. The stellar track record has to come back down to Earth at some point, doesn't it?

    One thing is for sure, the death of Apple co-founder and long-time CEO Steve Jobs hasn't had much of an effect on the stock's performance, and people betting against the company haven't done well. Our models remain enamored of the company, we have had a BUY on it since January 5, 2015.

    FULL DISCLOSURE: While we must admit that we long ago put our Mac Mini and iPod touch out to pasture in lieu of a Dell Windows machine and a Google Android Nexus 7 tablet, we still get frustrated when we get text messages from friends we cannot read because we don't have an iPhone.

    As a bonus to our Newsletter readers,
    we are offering a FREE DOWNLOAD of one of our Stock Reports

    Read our Complete Detailed Valuation Report on Apple HERE.

    Below is today's data on AAPL:

    VALUENGINE RECOMMENDATION: ValuEngine continues its BUY recommendation on APPLE INC for 2015-06-09. Based on the information we have gathered and our resulting research, we feel that APPLE INC has the probability to OUTPERFORM average market performance for the next year. The company exhibits ATTRACTIVE Company Size and Sharpe Ratio.


     






    ValuEngine Forecast
     Target
    Price*
    Expected
    Return
    1-Month128.510.86%
    3-Month129.451.60%
    6-Month132.914.31%
    1-Year140.5310.29%
    2-Year146.4614.94%
    3-Year93.98-26.24%

     















    Valuation & Rankings
    Valuation13.64% overvaluedValuation Rank(?) 36
    1-M Forecast Return0.86%1-M Forecast Return Rank 95
    12-M Return40.91%Momentum Rank(?) 90
    Sharpe Ratio1.06Sharpe Ratio Rank(?) 93
    5-Y Avg Annual Return25.34%5-Y Avg Annual Rtn Rank 92
    Volatility23.90%Volatility Rank(?) 71
    Expected EPS Growth9.32%EPSGrowth Rank(?) 42
    Market Cap (billions)742.19Size Rank 100
    Trailing P/E Ratio15.16Trailing P/E Rank(?) 77
    Forward P/E Ratio13.87Forward P/E Ratio Rank 68
    PEG Ratio1.63PEG Ratio Rank 31
    Price/Sales3.50Price/Sales Rank(?) 28
    Market/Book6.17Market/Book Rank(?) 22
    Beta0.83Beta Rank 58
    Alpha0.29Alpha Rank 90

    Tags: AAPL, technology
    Jun 10 2:16 PM | Link | Comment!
  • Airlines Face Challenging Environment

    VALUATION WATCH: Overvalued stocks now make up 62.35% of our stocks assigned a valuation and 24.55% of those equities are calculated to be overvalued by 20% or more. ALL sectors are calculated to be overvalued--with eight at or near double digits.

    --Losing Altitude? Airlines Face Challenging Environment

    This week is proving to be a bad one for airline stocks as negative earnings forecasts and slowed expansion plans have seen investors dumping shares of major carriers. So far this week, we have seen most of the major US carriers provide guidance that predicts weaker demand, excess capacity, and lower profits for the rest of 2015.

    Gary C. Kelly, Southwest (NYSE:LUV) Chairman of the Board, President, and Chief Executive Officer, noted that despite "Solid traffic and revenue trends [in May] . . . and [strong growth in] markets under development . . . with weaker than expected economic growth, we continue to evaluate our 2016 capacity plans with a current intent to cap our [Available Seat Miles (NYSEMKT:ASM)] growth to approximately six percent, year-over-year."

    American Airlines (NASDAQ:AAL) cut its forecast for Q2 unit revenue and pretax margins and forecast a decrease in revenue-per seat-mile of 6%-8%.

    United Continental Holdings (NYSE:UAL) noted this week that it also expects unit revenue for this quarter to decline--at a rate of 5%-6%

    Delta Airlines (NYSE:DAL) made similar statements to the media and President Ed Bastian noted that the company sees several routes where there is excess capacity present and noted that, like Southwest, the airline is re-evaluating expansion places for later in the year.

    Airlines had been on a roll for the past few years, with hedging strategies--and then lower prices--for fuel, added fees for--and profits from-- everything from blankets and pillows to carry on bags, and better labor relations leading to good profits and filled aircraft. Even if passengers found that the new conditions destroyed much of the romance associated with flying, share holders were reaping the benefits.

    But, now it appears as though many carriers may be in need of some new gimmicks and revenue sources. Fuel costs remain relatively low, but they are running out of new ways to boost the bottom line. Planes are often @80% full. Investors have noticed the situation, and a sell off has been underway since last month, when shares of Southwest, American, Delta, and United lost @ $10 billion as executives began to sound the alarm about the weakening outlook. Shares in the majors took a beating yesterday as well, with double-digit losses now the case across the board when compared to just one -month ago.

    Below is our valuation data and some other metrics for the largest US carriers. As you can see, our models still find the companies relatively undervalued, but it will take some time for adjusted earnings estimates to make their way through our systems. Many of these companies remain ranked a "BUY" or "STRONG BUY" at the moment, as the system still ranks them as better investment targets that other stocks in our data base. They still have decent one-year forecast return estimates--for the most part.

     

     

     

     

     

     

    TickerCompany NameMarket PriceValuationLast 12-M RetrnAvg 5-Yr Retn (%)P/E Ratio
    AALAMERICAN AIRLINES39.86-9.85%-0.75%36.54%5.29
    ALKALASKA AIR GROUP62.53-9.45%27.02%34.23%12.61
    DALDELTA AIR LINES40.75-7.45%2.10%23.01%11.21
    LUVSOUTHWEST AIRLINES36.11-25.05%36.52%21.83%13.05
    UALUNITED CONTINENTAL HOLDINGS51.73-17.83%16.59%20.07%6.03

    As a bonus to our Newsletter readers,
    we are offering a FREE DOWNLOAD of one of our Stock Reports

    Read our Complete Detailed Valuation Report on Southwest Airlines HERE.

    Below is today's data on LUV:

    Southwest Airlines is a major domestic airline that provides primarily shorthaul, high-frequency, point-to-point, low-fare service. Southwest operates over Boeing 737 aircraft in numerous cities. Southwest has the lowest operating cost structure in the domestic airline industry and consistently offers the lowest and simplest fares. Southwest also has one of the best overall Customer Service records.

    VALUENGINE RECOMMENDATION: ValuEngine continues its STRONG BUY recommendation on SOUTHWEST AIR for 2015-06-08. Based on the information we have gathered and our resulting research, we feel that SOUTHWEST AIR 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-Month36.591.33%
    3-Month36.00-0.30%
    6-Month36.200.24%
    1-Year41.9016.03%
    2-Year32.46-10.10%
    3-Year22.57-37.51%

     















    Valuation & Rankings
    Valuation25.05% undervaluedValuation Rank(?) 90
    1-M Forecast Return1.33%1-M Forecast Return Rank 100
    12-M Return36.52%Momentum Rank(?) 88
    Sharpe Ratio0.80Sharpe Ratio Rank(?) 87
    5-Y Avg Annual Return21.83%5-Y Avg Annual Rtn Rank 89
    Volatility27.18%Volatility Rank(?) 64
    Expected EPS Growth21.69%EPSGrowth Rank(?) 61
    Market Cap (billions)24.51Size Rank 95
    Trailing P/E Ratio13.05Trailing P/E Rank(?) 85
    Forward P/E Ratio10.73Forward P/E Ratio Rank 85
    PEG Ratio0.60PEG Ratio Rank 60
    Price/Sales1.30Price/Sales Rank(?) 60
    Market/Book4.13Market/Book Rank(?) 31
    Beta0.92Beta Rank 53
    Alpha0.25Alpha Rank 88

    Tags: UAL, DAL, AAL, LUV, ALK, airlines
    Jun 09 12:51 PM | Link | Comment!
  • Business Services Stocks And The Latest On Wal-Mart From ValuEngine

    VALUATION WATCH: Overvalued stocks now make up 61.88% of our stocks assigned a valuation and 23.93% of those equities are calculated to be overvalued by 20% or more. ALL sectors are calculated to be overvalued--with eight at or near double digits.

    ValuEngine Index Overview

     

     

     

     

     

    IndexWeek OpenFriday AMChange% ChangeYTD
    DJIA18017.8217901.2-116.62-0.65%0.44%
    NASDAQ5094.945058.11-36.83-0.72%7.01%
    RUSSELL 20001252.021244.29-7.73-0.62%3.29%
    S&P 5002108.642094.07-14.57-0.69%1.71%

     

    ValuEngine Market Overview

     

     


     

    Summary of VE Stock Universe
    Stocks Undervalued38.12%
    Stocks Overvalued61.88%
    Stocks Undervalued by 20%12.74%
    Stocks Overvalued by 20%23.93%
    ValuEngine Sector Overview

     
















    SectorChangeMTDYTDValuationLast 12-MReturnP/E Ratio
    Medical-0.72%0.49%13.20%19.34% overvalued14.75%30.47
    Aerospace-1.47%0.03%5.37%16.48% overvalued-4.22%21.37
    Computer and Technology-0.90%0.33%7.87%13.49% overvalued6.29%31.27
    Consumer Staples-0.82%0.44%4.26%12.11% overvalued5.17%24.16
    Consumer Discretionary-1.13%-0.51%3.13%11.65% overvalued1.95%22.31
    Retail-Wholesale-1.12%0.04%1.15%11.60% overvalued7.20%25.54
    Business Services-0.54%0.06%3.92%10.32% overvalued1.10%24.52
    Multi-Sector Conglomerates-0.26%0.53%8.70%9.27% overvalued0.60%27.44
    Oils-Energy-1.74%-1.03%0.60%5.96% overvalued-32.94%24.40
    Finance-0.57%0.08%3.40%5.55% overvalued2.62%17.60
    Construction-0.93%0.30%5.00%4.61% overvalued-5.81%16.77
    Utilities-0.88%0.23%1.41%3.86% overvalued1.55%19.01
    Auto-Tires-Trucks-0.73%0.18%3.63%3.02% overvalued-4.90%20.14
    Industrial Products-1.43%-0.69%1.54%2.52% overvalued-4.95%21.91
    Transportation-1.19%-0.01%1.89%2.38% overvalued-13.85%24.70
    Basic Materials-1.01%0.85%3.21%0.91% overvalued0.53%24.25

     

    Sector Talk--Business Services

    Below, we present the latest data on Business Services 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.

    Please Click Here to See ALL of Our Investment Tools and Newsletters

    Top-Five Business Services Stocks--Short-Term Forecast Returns

     

     

     

     

     

     

    TickerNameMkt PriceValuation(%)Last 12-M Retn(%)
    CBZCBIZ INC9.08-5.51%6.45%
    CATMCARDTRONICS INC36.77-12.14%26.88%
    WUWESTERN UNION21.8919.87%35.37%
    CVGCONVERGYS CORP2513.69%14.57%
    WNSWNS HLDGS-ADR26.516.72%47.55%

    Top-Five Business Services Stocks--Long-Term Forecast Returns

     

     

     

     

     

     

    TickerNameMkt PriceValuation(%)Last 12-M Retn(%)
    CBZCBIZ INC9.08-5.51%6.45%
    CATMCARDTRONICS INC36.77-12.14%26.88%
    WUWESTERN UNION21.8919.87%35.37%
    CVGCONVERGYS CORP2513.69%14.57%
    WNSWNS HLDGS-ADR26.516.72%47.55%

    Top-Five Business Services Stocks--Composite Score

     

     

     

     

     

     

    TickerNameMkt PriceValuation(%)Last 12-M Retn(%)
    CATMCARDTRONICS INC36.77-12.14%26.88%
    WUWESTERN UNION21.8919.87%35.37%
    CBZCBIZ INC9.08-5.51%6.45%
    LAMRLAMAR ADVER CO59.89-6.18%21.38%
    GDOTGREEN DOT CP-A14.92-36.41%-18.78%

    Top-Five Business Services Stocks--Most Overvalued

     

     

     

     

     

     

    TickerNameMkt PriceValuation(%)Last 12-M Retn(%)
    NESNUVERRA ENV SOL5.26164.75%-69.10%
    NSPINSPERITY INC53.1851.32%66.08%
    HCKTHACKETT GROUP12.0240.76%97.05%
    CORECORE-MARK HLDG55.1139.15%33.31%
    HILHILL INTL INC5.3534.56%-15.75%

     

    Free Download for Readers

    As a bonus to our Free Weekly Newsletter subscribers,
    we are offering a FREE DOWNLOAD of one of our Stock Reports

    Wal-Mart Stores, Inc. (NYSE:WMT) is the world's largest retailer. They are engaged in the operation of mass merchandising stores, which serve their customers primarily through the operation of three segments, which are the Wal-Mart Stores segment, the SAM'S Club segment and the International segment.

    ValuEngine continues its HOLD recommendation on WAL-MART STORES for 2015-06-04. Based on the information we have gathered and our resulting research, we feel that WAL-MART STORES has the probability to ROUGHLY MATCH average market performance for the next year. The company exhibits ATTRACTIVE Company Size but UNATTRACTIVE Earnings Growth Rate.


     

     

     

     

     

     

    ValuEngine Forecast
     Target
    Price*
    Expected
    Return
    1-Month74.390.33%
    3-Month75.151.34%
    6-Month75.892.35%
    1-Year77.053.92%
    2-Year73.12-1.39%
    3-Year76.322.93%

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    Valuation & Rankings
    Valuation1.01% overvaluedValuation Rank(?) 60
    1-M Forecast Return0.33%1-M Forecast Return Rank 75
    12-M Return-3.41%Momentum Rank(?) 46
    Sharpe Ratio0.51Sharpe Ratio Rank(?) 75
    5-Y Avg Annual Return7.69%5-Y Avg Annual Rtn Rank 61
    Volatility15.17%Volatility Rank(?) 89
    Expected EPS Growth-2.01%EPSGrowth Rank(?) 23
    Market Cap (billions)239.00Size Rank 100
    Trailing P/E Ratio14.91Trailing P/E Rank(?) 78
    Forward P/E Ratio15.22Forward P/E Ratio Rank 60
    PEG Ration/aPEG Ratio Rank n/a
    Price/Sales0.49Price/Sales Rank(?) 84
    Market/Book3.83Market/Book Rank(?) 33
    Beta0.43Beta Rank 75
    Alpha-0.07Alpha Rank 50

    Jun 05 12:48 PM | Link | Comment!
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