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Steve Hach
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Steve Hach is the Senior Editor at ValuEngine.com, a Newtown, Pennsylvania-based stock valuation and forecast service. ValuEngine utilizes Ivy League financial research as the basis for its coverage of more than 7000 US, Japanese, and Canadian, and other foreign stocks. Hach utilizes... More
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  • ValuEngine Weekly June 3, 2011 0 comments
    Jun 3, 2011 10:25 AM | about stocks: LVS, BAC, C, WFC, MI, FAF, SNBC, SFE, NCT, GRP, UBS, ING, MCO, AMP, XL, GRT, SLG, TRAD

     

     

    Go to ValuEngine.com
    June 3, 2011


    Seeking Alpha Readers should check out our Seeking Alpha VE Investment App HERE
    ValuEngine Index Overview
    Index
    Week Open
    Thurs. Close
    Change
    % Change
    YTD
    DJIA
    12443.4
    12248.5
    -194.9
    -1.57%
    5.80%
    NASDAQ
    2824.25
    2773.31
    -50.94
    -1.80%
    4.54%
    RUSSELL 2000
    843.32
    820.69
    -22.63
    -2.68%
    4.73%
    S&P 500
    1331.1
    1312.94
    -18.16
    -1.36%
    4.40%
    ValuEngine Market Overview
    Summary of VE Stock Universe
    Stocks Undervalued
    50.64%
    Stocks Overvalued
    49.36%
    Stocks Undervalued by 20%
    21.20%
    Stocks Overvalued by 20%
    20.47%

    .

    ValuEngine Sector Overview
    Sector
    Change
    MTD
    YTD
    Valuation
    Last 12-MReturn
    P/E Ratio
    Utilities
    -0.05%
    -0.04%
    5.04%
    8.72% overvalued
    25.03%
    23.51
    Oils-Energy
    -0.22%
    -0.19%
    1.11%
    8.01% overvalued
    45.12%
    48.24
    Multi-Sector Conglomerates
    0.80%
    0.91%
    2.40%
    7.58% overvalued
    33.10%
    27.44
    Business Services
    0.24%
    0.40%
    3.53%
    4.42% overvalued
    16.38%
    36.89
    Consumer Staples
    -0.42%
    -0.36%
    -6.13%
    3.75% overvalued
    18.81%
    20.95
    Computer and Technology
    0.11%
    0.16%
    8.82%
    2.40% overvalued
    34.92%
    44.47
    Retail-Wholesale
    -0.66%
    -0.57%
    4.19%
    2.33% overvalued
    22.80%
    34.68
    Medical
    -0.04%
    0.02%
    15.42%
    2.22% overvalued
    19.79%
    34.71
    Industrial Products
    -0.39%
    -0.31%
    -0.45%
    2.05% overvalued
    26.93%
    31.62
    Transportation
    0.40%
    0.45%
    -3.51%
    1.59% overvalued
    18.90%
    19.66
    Consumer Discretionary
    -0.05%
    0.09%
    3.47%
    0.76% overvalued
    15.71%
    29.09
    Aerospace
    0.18%
    0.20%
    11.65%
    0.67% overvalued
    24.64%
    18.44
    Finance
    -0.16%
    -0.10%
    1.24%
    0.48% overvalued
    8.99%
    24.80
    Auto-Tires-Trucks
    0.22%
    0.30%
    -9.40%
    0.98% undervalued
    46.91%
    18.62
    Basic Materials
    -0.01%
    0.04%
    -5.46%
    2.29% undervalued
    48.14%
    23.84
    Construction
    -0.30%
    -0.27%
    -5.57%
    5.36% undervalued
    3.26%
    48.33
      Sector Talk--Finance

       Bad news for financial stocks this week as the Moody's Investors Service reported that the era of "Too Big to Fail" may be over for some large institutions.  According to the Wall Street Journal, Moody's has warned that it may issue a credit-rating cut for Bank of America (BAC), Citigroup (C), and Wells Fargo (WFC).    The reasons for the potential downgrades would include the removal of support from the Federal Government as the Dodd-Frank financial reform bill is implemented.

      Our proprietary valuation, forecast, and ratings for these three banks are below.  Of the three, only Wells Fargo avoids a Sell rating.  All three banks show negative long-term forecast figures--with Wells Fargo again at the top of the heap at just slightly negative.  On a valuation basis, Bank of America and Wells Fargo are far more attractive than Citigroup, which has pegged our overvaluation metric at 300%.  For our fundamentally-based quantitative systems, Wells Fargo is not as problematic as Citigroup or Bank of America.

     
    Ticker 
    		       
    Company Name 
    Mkt Price
    Valuation(%)
    VE Rating
    Forecast 1-Mon Retn(%)
    Forecast 1-Yr Retn(%)
    Last 12-Mon Retn (%)
    5-Yr Avg Retn (%)
    P/E Ratio
    BAC
    BANK OF AMER CP
    11.24
    -33.1
    2
    0.5
    -8.26
    -26.97
    -26.78
    14.88
    C
    CITIGROUP INC
    39.65
    300
    1
    -2.61
    -23.8
    3.01
    -2.98
    126.39
    WFC
    WELLS FARGO-NEW
    26.94
    -21.77
    3
    1.58
    -0.2
    -3.68
    -3.34
    10.87

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

    Top-Five Finance Sector Stocks--Short-Term Forecast Returns

    Ticker
    Name
    Mkt Price
    Valuation(%)
    Last 12-M Retn(%)
    MI MARSHALL&ILSLEY 7.85 -37.51 -2.73
    FAF FIRST AMER FINL 15.43 -2.78 7.83
    SNBC SUN BANCORP/NJ 3.75 -62.87 -18.48
    SFE SAFEGUARD SCTFC 18.83 -75 66.64
    NCT NEWCASTLE INV 5.29 -70.85 84.32

    Top-Five Finance Sector Stocks--Long-Term Forecast Returns

    Ticker
    Name
    Mkt Price
    Valuation(%)
    Last 12-M Retn(%)
    MI MARSHALL&ILSLEY 7.85 -37.51 -2.73
    SNBC SUN BANCORP/NJ 3.75 -62.87 -18.48
    FAF FIRST AMER FINL 15.43 -2.78 7.83
    MIM MI DEVLPMNTS -A 30.62 N/A 139.97
    SFE SAFEGUARD SCTFC 18.83 -75 66.64

    Top-Five Finance Sector Stocks--Composite Score

    Ticker
    Name
    Mkt Price
    Valuation(%)
    Last 12-M Retn(%)
    UBS UBS AG 19.18 -41.18 43.13
    ING ING GROEP-ADR 11.84 -37.73 48.56
    MCO MOODYS CORP 39.69 -13.87 102.71
    AMP AMERIPRISE FINL 58.99 -15.7 48.51
    SFE SAFEGUARD SCTFC 18.83 -75 66.64

    Top-Five Finance Sector Stocks--Most Overvalued

    Ticker
    Name
    Mkt Price
    Valuation(%)
    Last 12-M Retn(%)
    C CITIGROUP INC 40.01 300 2.09
    XL XL GROUP PLC 22.85 192.21 34.17
    GRT GLIMCHER REALTY 9.91 179.72 51.53
    SLG SL GREEN REALTY 86.42 143.99 40.77
    TRAD TRADESTATION GP 9.72 125.56 28.91


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    Free Report Download for Subscribers

    As a bonus to our Free Weekly Newsletter subscribers, we are offering a FREE DOWNLOAD of one of our Detailed Valuation Reports--this report is normally $25.00.  

      This week's free download is our report on Las Vegas Sands Corp (LVS).  Las Vegas Sands Corp is a hotel, gaming, and retail mall company headquartered in Las Vegas, Nevada. The company owns The Venetian Resort Hotel Casino, the Sands Expo and Convention Center, Venetian Interactive, an internet based venture, and Venetian Macao Limited, a developer of multiple casino hotel resort properties in The People's Republic of China's Special Administrative Region of Macao.

    Weekly Subscribers can download a FREE Detailed Valuation Report on LVS 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


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    Themes: finance Stocks: LVS, BAC, C, WFC, MI, FAF, SNBC, SFE, NCT, GRP, UBS, ING, MCO, AMP, XL, GRT, SLG, TRAD
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