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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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  • Is Smaller Really Better? --Tech Giant Hewlett-Packard Announces Split Of Company

    VALUATION WATCH IS OFF: Overvalued stocks now make up 51% of our stocks assigned a valuation and 14.66% of those equities are calculated to be overvalued by 20% or more. Eleven sectors are calculated to be overvalued.

    Is Smaller Really Better?

    --Tech Giant Hewlett-Packard Announces Split of Compay

    Hewlett Packard (NYSE:HPQ) is one of the leading global providers of computing and imaging solutions and services for business and home. The company is focused on capitalizing on the opportunities of the Internet and the proliferation of electronic services. Its major businesses include Imaging and Printing Systems, Computing Systems and Information Technology Services.

    In effort to improve its competitive position, the company announced yesterday that it would split itself into two entities. One side, HP Incorporated, will focus on the current HP's computer and printer operations. The other side, to be known as Hewlett-Packard Enterprise, will focus on services sold to large enterprises such as software, consulting, storage, and servers. The issue doesn't seem to be the printers and such, the enterprise portion of the business is what seems to be holding the company back--of course, one can recall a few real issues on that consumer side--HP touchpad tablet debacle? Anyone? Anyone?

    CEO Meg Whitman voiced the usual justifications for executives searching for solutions via such plans: the move will make the company "nimble," more able to recognize and exploit opportunities, etc. But, as the Wall Street Journal notes today, Whitman's new enterprise company will be cut off from the ample resources the computer and printer business currently provides. How does one exploit opportunities and buy up promising new technology, talent, and ideas if one is strapped for ready cash when some big tech players are sitting on billions?

    So far, the market has blessed the move. HP shares jumped almost 5% on the news of the split in yesterday's trading.

    Meanwhile, ValuEngine continues its HOLD recommendation on Hewlett Packard for 2014-10-06. Based on the information we have gathered and our resulting research, we feel that Hewlett Packard has the probability to ROUGHLY MATCH average market performance for the next year. The company exhibits ATTRACTIVE Company Size but UNATTRACTIVE Earnings Growth Rate.

    Below is today's data on HPQ:


     






    ValuEngine Forecast
     Target
    Price*
    Expected
    Return
    1-Month36.920.14%
    3-Month37.190.86%
    6-Month37.732.32%
    1-Year37.491.67%
    2-Year46.3725.77%
    3-Year16.72-54.64%

     















    Valuation & Rankings
    Valuation33.02% overvaluedValuation Rank(?) 8
    1-M Forecast Return0.14%1-M Forecast Return Rank 61
    12-M Return76.16%Momentum Rank(?) 95
    Sharpe Ratio-0.16Sharpe Ratio Rank(?) 33
    5-Y Avg Annual Return-5.72%5-Y Avg Annual Rtn Rank 36
    Volatility34.66%Volatility Rank(?) 56
    Expected EPS Growth5.75%EPSGrowth Rank(?) 24
    Market Cap (billions)69.00Size Rank 99
    Trailing P/E Ratio9.93Trailing P/E Rank(?) 94
    Forward P/E Ratio9.39Forward P/E Ratio Rank 87
    PEG Ratio1.73PEG Ratio Rank 19
    Price/Sales0.62Price/Sales Rank(?) 80
    Market/Book2.39Market/Book Rank(?) 46
    Beta1.53Beta Rank 25
    Alpha0.28Alpha Rank 89

    Tags: HPQ, technology
    Oct 07 2:52 PM | Link | Comment!
  • Transportation Stocks Ranked And Rated By ValuEngine.com And FREE REPORT On Chatham Lodging Trust

    Our Valuation WARNING is OFF: Valuation is now well within "normal" range. Overvalued stocks now make up 51.34% of our stocks assigned a valuation and 14.74% of those equities are calculated to be overvalued by 20% or more. Ten sectors are calculated to be overvalued.

    ValuEngine Index Overview

     

     

     

     

     

    IndexWeek OpenFriday PMChange% ChangeYTD
    DJIA17107.6917000-107.69-0.63%2.55%
    NASDAQ4465.844482.4216.580.37%7.32%
    RUSSELL 20001110.431108.29-2.14-0.19%-4.76%
    S&P 5001978.961968.03-10.93-0.55%6.47%

     

    ValuEngine Market Overview

     

     


     

    Summary of VE Stock Universe
    Stocks Undervalued48.66%
    Stocks Overvalued51.34%
    Stocks Undervalued by 20%14.71%
    Stocks Overvalued by 20%14.74%
    ValuEngine Sector Overview

     
















    SectorChangeMTDYTDValuationLast 12-MReturnP/E Ratio
    Consumer Staples0.50%-0.59%-0.00%9.78% overvalued9.42%23.74
    Multi-Sector Conglomerates-0.60%-1.60%-1.91%5.49% overvalued5.08%20.62
    Computer and Technology0.42%-1.18%1.50%5.29% overvalued6.05%30.03
    Medical0.75%-0.30%7.66%4.90% overvalued11.69%29.42
    Aerospace-0.25%-2.43%-3.75%3.53% overvalued18.58%19.62
    Finance0.13%-0.60%1.27%3.20% overvalued5.23%17.16
    Retail-Wholesale0.99%-0.27%-7.60%2.66% overvalued-2.74%23.31
    Transportation0.28%-1.76%3.39%2.57% overvalued10.16%18.73
    Utilities0.38%-0.63%4.19%2.03% overvalued6.54%19.37
    Consumer Discretionary0.35%-0.92%-5.72%0.94% overvalued2.34%26.72
    Business Services0.72%-0.64%-2.02%0.11% undervalued14.28%23.75
    Oils-Energy-0.91%-2.73%4.54%0.85% undervalued5.92%25.81
    Industrial Products0.02%-1.30%-5.59%2.27% undervalued5.89%22.09
    Auto-Tires-Trucks0.26%-2.48%-4.04%2.80% undervalued0.32%15.54
    Construction-0.51%-1.09%-4.00%3.79% undervalued5.16%24.05
    Basic Materials-0.88%-1.78%-2.91%12.71% undervalued-4.48%25.02

    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

    Chatham Lodging Trust (NYSE:CLDT) is a self-advised hotel REIT, formed to invest in premium-branded upscale extended-stay and select-service hotels. The Company intends to invest primarily in hotels in large metropolitan markets in the United States. Chatham Lodging Trust expects that a significant portion of its portfolio will consist of hotels in the upscale extended-stay market, including brands such as Residence Inn by Marriott, Homewood Suites by Hilton and Summerfield Suites by Hyatt. It also intends to invest in premium-branded select-service hotels such as Courtyard by Marriott, Hampton Inn and Hampton Inn and Suites.

    ValuEngine updated its recommendation from BUY to STRONG BUY for Chatham Lodging Trust on 2014-10-02. Based on the information we have gathered and our resulting research, we feel that Chatham Lodging Trust has the probability to OUTPERFORM average market performance for the next year. The company exhibits ATTRACTIVE P/E Ratio and Momentum.

    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 Chatham Lodging Trust HERE.

    Sector Talk--Transportation

    Below, we present the latest data on Transportation stocks from our Institutional software package (Pending:VEI). 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 Transportation Stocks--Short-Term Forecast Returns

     

     

     

     

     

     

    TickerNameMkt PriceValuation(%)Last 12-M Retn(%)
    TRNTRINITY INDS IN41.53-5.4680.1
    TNKTEEKAY TANKERS3.54-45.0532.58
    DHTDHT HOLDINGS6.33-24.5141.29
    ALKALASKA AIR GRP42.92-6.6232.27
    ALAIR LEASE CORP32.48-14.7113.92

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

     

     

     

     

     

     

    TickerNameMkt PriceValuation(%)Last 12-M Retn(%)
    TRNTRINITY INDS IN41.53-5.4680.1
    TNKTEEKAY TANKERS3.54-45.0532.58
    DHTDHT HOLDINGS6.33-24.5141.29
    ALKALASKA AIR GRP42.92-6.6232.27
    ALAIR LEASE CORP32.48-14.7113.92

    Top-Five Transportation Stocks--Composite Score

     

     

     

     

     

     

    TickerNameMkt PriceValuation(%)Last 12-M Retn(%)
    TRNTRINITY INDS IN41.53-5.4680.1
    ALKALASKA AIR GRP42.92-6.6232.27
    GMTGATX CORP58.53-8.9923.61
    ALAIR LEASE CORP32.48-14.7113.92
    DALDELTA AIR LINES35.286.7145.48

    Top-Five Transportation Stocks--Most Overvalued

     

     

     

     

     

     

    TickerNameMkt PriceValuation(%)Last 12-M Retn(%)
    YRCWYRC WORLDWD INC19.5230010.53
    XPOXPO LOGISTICS37.4291.6869.94
    HAHAWAIIAN HLDGS13.3844.6978.4
    TKTEEKAY CORP66.8644.6659.27
    UALUNITED CONT HLD46.1343.2149.14
    Tags: TRN, TNK, DHT, ALK, AL, GMT, DAL, YRCW, XPO, HA, TK, UAL, CLDT, transports
    Oct 03 2:58 PM | Link | Comment!
  • ValuEngine.com: Overvaluation Down To "Normal" Range, Buy Signal?

    VALUATION WATCH: Valuation is now well within "normal" range. Overvalued stocks now make up 50.36% of our stocks assigned a valuation and 15.45% of those equities are calculated to be overvalued by 20% or more. Fourteen sectors are calculated to be overvalued--one by double digits.

    With Latest Market Action, Overvaluation Now "Normal"

    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. 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 issued our last valuation warning on August 19, 2014. At that time, the S&P was at 1971.74. Prior to that warning, we had essentially operated under an overvalued market environment with a Valuation Warning or Watch in effect since May, 2013. We now calculate that 50.36% of stocks are overvalued and 15.45% of those stocks are overvalued by 20% or more. Yesterday's market pull back-- combined with changes in earnings and stock prices-- have resulted in figures that are now the lowest recorded since January 2, 2013.

    In addition to the overall valuation metrics, we see that on a sector basis the declines in overvaluation have also relived some pressure. Fourteen of sixteen sectors remain overvaluedand only one of is calculated to be overvalued by double digits. This is quite different from the situation over the past few months.

    With these sorts of numbers, we find ourselves back in "normal" range from a valuation perspective. While the market may decline further, those investors looking for a "Buy" signal may certainly find one from the perspective of our valuation model. On the other hand, this rally has been unstoppable for most of the Obama Administration. Some analysts say we are due for a pullback.

    However, we do not believe that Ebola will pose a problem for the US. We do not believe that the Federal Reserve is going to hastily pull back from their current policies--which have provided the market so much succor. Nor do we find a negative economic environment within the US--with the exception of the lagging labor market and the failure of the recovery to really take off for workers.

    In the recent past, the market has shaken off these sorts of setbacks. We would expect that trend to continue. So, this momentary respite from high valuations may be a time to reinforce existing positions or make purchases of stocks which up until now had been overheated from a valuation perspective.

    The chart below tracks the valuation metrics from January 2013. It shows overvaluation levels in excess of 50%. We issue a Valuation Watch when the metric exceeds 60% and a Valuation Warning when the metric exceeds 65%.

    (click to enlarge)

    ValuEngine Market Overview

     

     

     

     

     

    Summary of VE Stock Universe
    Stocks Undervalued49.64%
    Stocks Overvalued50.36%
    Stocks Undervalued by 20%16.13%
    Stocks Overvalued by 20%15.45%

     

    ValuEngine Sector Overview

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    SectorChangeMTDYTDValuationLast 12-MReturnP/E Ratio
    Consumer Staples-1.21%-1.15%-0.46%12.31% overvalued10.34%24.69
    Computer and Technology-1.83%-1.71%1.08%9.49% overvalued7.86%31.21
    Multi-Sector Conglomerates-1.09%-1.05%-1.24%9.21% overvalued6.11%21.61
    Medical-1.24%-1.15%6.65%7.50% overvalued12.86%30.15
    Aerospace-2.34%-2.21%-3.37%7.45% overvalued20.35%19.24
    Transportation-2.19%-2.08%3.03%6.37% overvalued12.37%19.62
    Retail-Wholesale-1.39%-1.32%-8.50%6.05% overvalued-0.52%23.64
    Finance-0.87%-0.76%1.14%5.22% overvalued6.19%17.31
    Consumer Discretionary-1.46%-1.33%-5.95%3.99% overvalued3.86%27.64
    Utilities-1.11%-1.07%3.85%3.32% overvalued8.40%19.69
    Business Services-1.52%-1.44%-3.04%3.01% overvalued15.12%23.60
    Oils-Energy-2.02%-1.91%5.64%2.05% overvalued7.55%24.89
    Industrial Products-1.53%-1.37%-5.48%1.06% overvalued6.41%22.04
    Auto-Tires-Trucks-3.44%-2.85%-4.43%0.38% overvalued2.43%16.31
    Construction-0.87%-0.80%-3.35%0.25% undervalued5.81%23.83
    Basic Materials-1.12%-1.01%-2.19%10.11% undervalued-3.69%24.73

    Tags: valuation
    Oct 02 1:43 PM | Link | Comment!
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