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ValuEngine Free Weekly Newsletter May 27, 2011

|Includes:ABEV, ADY, BRFS, CALM, CCE, COT, EL, FMX, Alphabet Inc. (GOOG), JOBS, MED, MNST, MSO, RCPI, SNMX, WBD

 

 

 

 
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May 27, 2011

 

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  ValuEngine Index Overview
Index
Week Open
Thurs. Close
Change
% Change
YTD
DJIA
12511.29 12402.8 -108.49 -0.87% 7.13%
NASDAQ
2815.96 2782.92 -33.04 -1.17% 4.90%
RUSSELL 2000
820.05 830.87 10.82 1.32% 6.03%
S&P 500
1333.07 1325.69 -7.38 -0.55% 5.41%
ValuEngine Market Overview
Summary of VE Stock Universe
Stocks Undervalued
48.89%
Stocks Overvalued
51.11%
Stocks Undervalued by 20%
20.28%
Stocks Overvalued by 20%
20.9%

.

ValuEngine Sector Overview
Sector
Change
MTD
YTD
Valuation
Last 12-MReturn
P/E Ratio
Utilities
0.42%
-1.75%
5.53%
8.79% overvalued
28.86%
23.51
Oils-Energy
0.78%
-7.47%
1.90%
8.47% overvalued
50.81%
48.53
Multi-Sector Conglomerates
0.49%
-5.16%
1.71%
8.22% overvalued
35.39%
27.40
Consumer Staples
0.37%
-4.81%
-5.78%
5.01% overvalued
22.77%
21.11
Business Services
0.53%
-3.40%
3.74%
4.66% overvalued
17.88%
37.10
Retail-Wholesale
0.93%
-1.16%
6.40%
3.99% overvalued
27.27%
35.14
Industrial Products
0.66%
-6.67%
1.34%
3.32% overvalued
32.87%
31.75
Computer and Technology
1.10%
-4.08%
9.18%
2.40% overvalued
38.95%
44.70
Medical
0.76%
-0.47%
15.71%
2.34% overvalued
24.38%
34.96
Transportation
0.68%
-3.98%
-2.47%
2.05% overvalued
22.79%
19.97
Finance
0.66%
-1.39%
2.04%
1.01% overvalued
12.27%
25.01
Consumer Discretionary
0.96%
-2.34%
4.74%
0.86% overvalued
19.94%
29.40
Aerospace
0.10%
-2.17%
10.60%
0.77% overvalued
28.45%
18.45
Auto-Tires-Trucks
0.76%
-7.32%
-8.50%
0.46% overvalued
52.78%
19.10
Basic Materials
0.42%
-5.86%
-5.38%
1.70% undervalued
51.31%
23.94
Construction
1.23%
-4.78%
-4.89%
4.41% undervalued
7.03%
48.86
  Sector Talk--Consumer Staples

  Below, we present the latest data on the Consume Staples Sector from our Institutional software package (Pending:VEI).  We applied some basic liquidity criteria--share price greater than $3 and average daily volume in excess of 100k shares.

Top-Five Consumer Staples Sector Stocks--Short-Term Forecast Returns

Ticker
Name
Mkt Price
Valuation(%)
Last 12-M Retn(%)
MSO
MARTHA STWT LIV
4.63
-36.66
-21.79
SNMX
SENOMYX INC
5.89
-33.69
60.93
MED
MEDIFAST INC
25.89
-16.02
-16.46
ADY
FEIHE INTL INC
9.72
-29.35
-40.26
SWM
SCHWEITZER-MAUD
49.56
-20.65
-1.22

Top-Five Consumer Staples Sector Stocks--Long-Term Forecast Returns

Ticker
Name
Mkt Price
Valuation(%)
Last 12-M Retn(%)
MSO
MARTHA STWT LIV
4.63
-36.66
-21.79
SNMX
SENOMYX INC
5.89
-33.69
60.93
MED
MEDIFAST INC
25.89
-16.02
-16.46
JOBS
51JOBS INC-ADR
58.99
5.28
209.01
ADY
FEIHE INTL INC
9.72
-29.35
-40.26

Top-Five Consumer Staples Sector Stocks--Composite Score

Ticker
Name
Mkt Price
Valuation(%)
Last 12-M Retn(%)
CCE
COCA-COLA ENTRP
28.68
-4.45
69.91
FMX
FOMENTO ECO-ADR
61.48
-5.32
50.72
BRFS
BRF-BRASIL FOOD
18.55
-3.87
46.99
EL
ESTEE LAUDER
99.6
9.58
78.14
COT
COTT CORP QUE
8.63
-14.18
16.15

Top-Five Consumer Staples Sector Stocks--Most Overvalued

Ticker
Name
Mkt Price
Valuation(%)
Last 12-M Retn(%)
ABV
AMBEV-PR ADR
30.96
105.2
70.58
CIGX
STAR SCIENTIFIC
4.73
82.66
215.33
HANS
HANSEN NATURAL
70.82
56.67
86.07
CALM
CAL-MAINE FOODS
28.56
55.77
-6.51
WBD
WIMM-BILL-DANN
32.75
46.55
78.96

  Subscribers can check out the latest valuation, forecast, and ratings figures on the Consumer Staples Sector from our Models HERE.

  Not a ValuEngine.com Premium Website member?  Then please consider signing up for our no obligation, two-week free trial today.   ValuEngine's award-winning stock Valuation and Forecast Models continue to provide investors with accurate, objective, and timely information on US stocks, ADRs, and foreign equities that trade on US markets.  Over the last few months, our stock picks have provided clients with many winners in both up and down periods. 

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with ValuEngine.com's software and website!
 

We also offer research reports on more than 700 Canadian Companies on our
Research Report Web Page.

Free Report Download for Subscribers

As a bonus to our Free Weekly Newsletter subscribers, we are now offering a FREE DOWNLOAD of one of our $ 25.00 Detailed Valuation Reports.  

  This week's free download is our report on Google (NASDAQ:GOOG)Google is a company focused on search services. Named for the mathematical term googol, Google operates web sites at many international domains, with the most trafficked being google.com. The company also serves corporate clients, including advertisers, content publishers and site managers with cost-effective advertising and a wide range of revenue generating search services.   Google made news this week with its announcement of a new Google "wallet" designed to allow smartphones running on Google's Android OS to pay for goods and services at check out counters.

Weekly Subscribers can download a FREE Detailed Valuation Report on GOOG HERE.

 Subscribers can check out the latest figures on Google from our models HERE.  

Seeking Alpha Readers should check out our Seeking Alpha VE Investment App HERE

If you have not subscribed and want to be able to receive a FREE $ 25.00 Detailed Valuation Report, you can subscribe to our Free Weekly Newsletter HERE

  What's Hot--Universe Valuations Continue Decline

Market Declines Confirm Valuation Watch Signal Again

  The ValuEngine Valuation Model tracks more than 5500 US equities, ADRs, and foreign stock which trade on US exchanges.  The model calculates a level of mispricing or valuation percentage for each equity based on 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.

  We track valuation figures and use them as a metric for making calls about the overall state of the market. Whenever we see levels in overvaluation levels in excess of @ 60% for the overall universe and 27.5% for the overvalued by 20% or more categories, we issue a valuation watch.  When overvaluation exceeds 65%, we issue a valuation warning.  

  Our watches and warnings let us know that the model thinks things are overheated, but they cannot tell us when a correction will occur, nor can they tell us its duration and depth.  In some cases the market heads for a long dive, in others we see just a momentary drop before the market resumes an upward climb. 

  Our last Valuation Watch took place from April 28th to May 4th.  We began that Valuation Watch with the SP 500 at 1355 and saw it rise to 1363 before dropping for a few weeks to a recent low of 1316.   As of today, the market is at 1325 and the overvaluation figure is at 51% while the overvaluation by 20% or more figure has receded to @20%. 

  Below, we include updated charts for the most recent Valuation Watches and Warnings.  The Valuation Watch periods are depicted in yellow while Valuation Warnings are depicted in red.  We still see that when the overvaluation spikes upward we get some market dips, although these may not be sustained or approach the levels of decline necessary to call it a "correction."  Overall, we find that the metric continues to provide some utility for market timing, allocation, and hedging strategies.

 

Suttmeier Says
--Commentary and Analysis from Chief Market Strategist Richard Suttmeier

If you have any comments or questions, send them to Rsuttmeier@Gmail.com 

 

Treasury Yields
10-Year--
(3.059) This yield ended Thursday below its 200-day simple moving average at 3.085.
This week’s pivot is 3.170 with today’s pivot at 3.095.

 

  The yield on the 10-Year US Treasury ended Thursday below its 200-day simple moving
average at 3.085 for the first time since December 6th. This enhances the flight to quality
scenario and should put pressure on US stocks.

 

Commodities and Forex 

 

Comex Gold--($1520.6) has held above its 50-day simple moving average at $1479.7. My quarterly pivot is $1523.7 the Troy ounce has been a magnet. This week’s risky level is $1566.6.

 

Nymex Crude--($100.24) is still between my annual pivots at $99.91 and $101.92. The 200-day simple moving average is at $90.39.

 

The Euro--(1.4129) broke below its 50-day simple moving average at 1.4340 on May 11th then failed there on a rebound last Friday, May 20th. The 200-day simple moving average is 1.3690.

 

Major Indices

 

  In the last hour of trading on Thursday the Dow Industrial Average, S&P 500 and NASDAQ were at the cusp of their 50-day simple moving averages at 12,424, 1328 and 2786 and all three faded into the close. The Dow, S&P and NASDAQ are poised for weekly closes below their five-week modified moving averages at 12,473, 1332.5 and 2803 respectively, which is a longer term bearish warning for stocks. Only the Dow will continue to be overbought technically.

 

Key Levels for the Major Equity Averages

Dow --(12,403) Daily closes below the 50-day simple moving average at 12,424 increases the odds that the weekly close will be below the five-week modified moving average at 12,473. Weekly technical momentum on my MOJO scale is still projected to be above 8.0 at 8.1 delaying a negative weekly chart. Daily and annual value levels are 12,362 and 11,491 with weekly risky level at 12,818.

 

S&P 500 –(1325.7) A close this week below the five-week modified moving average at 1332.5 shifts the weekly chart profile to negative. Daily closes below the 50-day simple moving average at 1328 is a warning with weekly technical momentum on my MOJO scale declining below 8.0. Today’s pivot is 1326.5.


NASDAQ – (2783) A close this week below the five-week modified moving average at 2803 shifts the weekly chart profile to negative. The NASDAQ gapped below its 50-day simple moving average at 2781 on Monday and was tested on strength at 2786 on Thursday with weekly technical momentum on my MOJO scale declining below 8.0. Today’s pivot is 2786.


NASDAQ 100 (NDX) – (2326) A close this week below the five-week modified moving average at 2355 keeps the weekly chart profile negative. NDX gapped below its 50-day at 2338 on Monday with weekly technical momentum on my MOJO scale declining below 8.0. Today’s risky level is 2331.


Dow Transports – (5406) A close this week below the five-week modified moving average at 5356 shifts the weekly chart profile to negative. The Transports tested and held its 50-day at 5327 on Wednesday with weekly technical momentum on my MOJO scale declining below 8.0. Today’s risky level is 5432.


Russell 2000 – (830.87) A close this week below the five-week modified moving average at 834.24 keeps the weekly chart profile negative. The small cap index gapped below its 50-day at 831.65 on Monday with weekly technical momentum on my MOJO scale declining below 8.0. Today’s value level is 827.09.


The SOX – (428.24) A close this week below the five-week modified moving average at 440.01 keeps the weekly chart profile negative. The SOX is below its 50-day at 435.48 with weekly technical momentum on my MOJO scale declining below 8.0. Today’s value level is 422.59.

Note:  For my technical momentum metrics--"MOJO"--I use what’s called “12x3x3 slow stochastic readings” from daily, weekly and monthly charts. The scale is zero to 10.0 where above 8.0 is overbought and below 2.0 is oversold.

 

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