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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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  • ValuEngine Weekly June 17,2011 0 comments
    Jun 17, 2011 2:26 PM | about stocks: ABEV, CALD, RNWK, CALX, AMSC, RMBS, TLAB, JBL, DELL, KLAC, STM, ALU, TDY, EGHT, MSTR, MSPD, N

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

    MARKET OVERVIEW

     

    Index

    started week

    Thursday Close

    4 day change

    4 day change %

    ytd

    DJIA

    11945.33

    11961.5

    16.17

    0.14%

    3.32%

    NASDAQ

    2649.3

    2623.7

    -25.6

    -0.97%

    -1.10%

    RUSSELL 2000

    781.84

    781.54

    -0.3

    -0.04%

    -0.27%

    S&P 500

    1271.31

    1267.64

    -3.67

    -0.29%

    0.80%

     

    Summary of VE Stock Universe

    Stocks Undervalued

    61.19%

    Stocks Overvalued

    38.81%

    Stocks Undervalued by 20%

    26.92%

    Stocks Overvalued by 20%

    13.19%

    SECTOR OVERVIEW

     

    Sector

    Change

    MTD

    YTD

    Valuation

    Last 12-MReturn

    P/E Ratio

    Aerospace

    -0.03%

    -2.09%

    9.52%

    3.22% undervalued

    23.42%

    17.82

    Auto-Tires-Trucks

    -0.51%

    -5.53%

    -14.71%

    10.43% undervalued

    31.73%

    18.15

    Basic Materials

    -2.00%

    -7.58%

    -11.88%

    12.37% undervalued

    36.71%

    33.25

    Business Services

    0.19%

    -3.81%

    4.11%

    2.58% undervalued

    12.32%

    26.46

    Computer and Technology

    -0.39%

    -6.32%

    1.52%

    6.26% undervalued

    26.23%

    36.72

    Construction

    -0.01%

    -7.68%

    -12.64%

    9.59% undervalued

    -2.49%

    27.72

    Consumer Discretionary

    0.14%

    -5.14%

    -1.85%

    5.05% undervalued

    16.64%

    30.51

    Consumer Staples

    0.39%

    -3.89%

    -8.87%

    1.87% undervalued

    12.55%

    31.43

    Finance

    0.39%

    -3.30%

    -2.09%

    5.16% undervalued

    5.87%

    27.21

    Industrial Products

    -0.37%

    -2.24%

    -3.03%

    8.23% undervalued

    23.66%

    27.85

    Medical

    0.22%

    -5.23%

    9.19%

    6.17% undervalued

    14.34%

    29.97

    Multi-Sector Conglomerates

    -0.47%

    -3.49%

    -1.99%

    16.35% overvalued

    25.95%

    24.6

    Oils-Energy

    -0.83%

    -6.75%

    -5.38%

    3.81% undervalued

    24.96%

    53.62

    Retail-Wholesale

    0.26%

    -4.13%

    0.53%

    4.47% undervalued

    18.94%

    33.4

    Transportation

    0.15%

    -4.40%

    -8.07%

    0.65% overvalued

    10.62%

    19.84

    Utilities

    0.39%

    -3.44%

    1.46%

    2.20% overvalued

    18.78%

    23.15

    Sector Talk—Technology and Computers

    Below, we present the latest data on the Technology and Computer Sector Sector from our Institutional software package (Pending:VEI). These results were filtered by market price and volume--no results below 3$/share or less than 100k shares/day volume.

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

    Ticker

    Name

    Mkt Price

    Valuation(%)

    Last 12-M Retn(%)

    CALD

    CALLIDUS SOFTWR

    5.42

    -10.84

    73.16

    RNWK

    REALNETWORKS

    3.43

    -20.61

    0.59

    CALX

    CALIX INC

    19.43

    -10.11

    70.29

    AMSC

    AMER SUPERCON

    7.76

    -64.13

    -74.93

    RMBS

    RAMBUS INC

    13.82

    -32.04

    -27.11


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

    Ticker

    Name

    Mkt Price

    Valuation(%)

    Last 12-M Retn(%)

    CALD

    CALLIDUS SOFTWR

    5.42

    -10.84

    73.16

    RNWK

    REALNETWORKS

    3.43

    -20.61

    0.59

    AMSC

    AMER SUPERCON

    7.76

    -64.13

    -74.93

    TLAB

    TELLABS INC

    4.11

    18.65

    -40.52

    RMBS

    RAMBUS INC

    13.82

    -32.04

    -27.11


     

    Top-Five Technology Sector Stocks--Composite Score

    Ticker

    Name

    Mkt Price

    Valuation(%)

    Last 12-M Retn(%)

    JBL

    JABIL CIRCUIT

    18.6

    -34.39

    37.17

    DELL

    DELL INC

    16

    -28.38

    14.37

    KLAC

    KLA-TENCOR CORP

    38.39

    -25.83

    29.09

    STM

    STMICROELECTRON

    9.66

    -37.96

    14.73

    ALU

    ALCATEL ADS

    5.06

    -32.22

    82.67


    Top-Five Technology Sector Stocks--Most Overvalued

    Ticker

    Name

    Mkt Price

    Valuation(%)

    Last 12-M Retn(%)

    LCRY

    LECROY CORP

    11.25

    205.42

    142.98

    EGHT

    8X8 INC

    3.7

    140.45

    160.56

    MSTR

    MICROSTRATEGY

    142.77

    113.66

    82.73

    MSPD

    MINDSPEED TECH

    7.37

    108.34

    -15.48

    N

    NETSUITE INC

    34.35

    103.9

    138.05

     

    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 onAmBev (ABV), AmBev based in São Paulo, is engaged in producing, distributing and selling beer, carbonated soft drinks and other non-alcoholic and non-carbonated products in many countries across the Americas. It maintains an agreement with PepsiCo International, Inc. to bottle, sell and distribute Pepsi products in Brazil and in other Latin American countries, including Lipton Ice Tea, Gatorade, H2OH!, Propel and Frutzzz.

    In a recent article discussed below, Forbes.com author Ken Rapoza noted the following about AmBev:  "It’s both a growth stock and a dividend stock, trading at 19 times forward earnings and paying dividend yields of around 3.75%.  Year-to-date, Ambev has outperformed Molson Coors Brewing Company and Anheuser Busch-InBev. "

    Weekly Subscribers can download a FREE Detailed Valuation Report on ABV 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--BRIC Value Stocks and Hot Market Calls

    Forbes.com uses ValuEngine.com Data for BRIC Stock Report

    In a recent Forbes.com article, author Ken Rapoza utilized a powerful feature of both our ValuEngine.com website and our Institutional software package (VEI)the ability to screen for dozens of criteria including country of origin for foreign stocks and ADRs.  Rapoza prefaced his article with the following thoughts about the importance of considering value when identifying investment targets:

     Every investor knows the importance of buying low and selling high. But many investors, especially the “odd-lot” retail investor with an E-Trade account, often buys on momentum and sells into broad market declines out of fears more downward pressure is on the way. That could mean selling a company that’s a value compared to its peers, and without systematic risks, would likely outperform its peers in the long run. It’s one thing to just buy into the market dips and another strategy altogether to seek out and buy shares of outstanding companies and brands trading at a discount to their price-to-earnings and price-to-book value. These stocks are buys whether the market is bullish or bearish, say analysts at ValuEngine.com, a stock valuation and forecasting firm that uses quantitative techniques and analysis to develop and backtest stock price movement.

    Rapoza's stock screen results were dominated by BRIC companies (from Brazil, Russia, India, and China.)  Our universe contains thousands of companies, @500 of these are foreign stocks and ADRs.  If you are looking to diversify your portfolio with worldwide exposure, you can rely on ValUEngine.com screening for this purpose. To see Rapoza's entire list of hot buys based on ValuEngine.com data, please got to his article at Forbes.com.

     

    ValuEngine Chief Market Strategist Richard Suttmeier Correctly Called Market Top Last Month

     ValuEngine.com Chief Market Strategist appeared on the Business News Network and Yahoo Finance a little over one month ago to offer his analysis.  At that time, Suttmeier noted that "stocks are overvalued fundamentally and overbought technically," and went on to say that "the May 2nd highs for so many [asset classes] marked a significant top for this market."

    As is often the case, an analyst who goes against the grain with a negative prognosis is subject to criticism from those with a vested interest in the mantra that "it's a good time to buy, the market is always going to go up, "buy and hold" is the best plan, etc. We received the usual amount of hate mail and criticism when Suttmeier gave his views back in mid-May.

    Here are the Major Indices (DJIA, SP500, and Nasdaq) performance since May 2, 2011.

    Suttmeier uses his own technical methods along with ValuEngine's fundamentals-based quant systems to inform his view of the market.  What were the ValuEngine metrics showing at the time Suttmeier--correctly--predicted the most-recent market top? 

    Here is the historic data so you can compare the situation when Suttmeier made his call to now.  Keep in mind that we issued a market valuation watch right at the end of April and warned clients that it was time to take some profits and hedge against the down side.

    Total Universe Valuation

    Date

    05/03/11

    06/17/11

    Stocks Undervalued

    40.39%

    61.19%

    Stocks Overvalued

    59.61%

    38.81%

    Stocks Undervalued by 20%

    15.74%

    26.92%

    Stocks Overvalued by 20%

    25.60%

    13.19%

    sp500

    1363.61

    1267.64


     

    Sector Valuation

     

     

    Date

    05/03/11

    06/17/11

    Aerospace

    6.83% overvalued

    3.22% undervalued

    Auto-Tires-Trucks

    6.20% overvalued

    10.43% undervalued

    Basic Materials

    5.18% overvalued

    12.37% undervalued

    Business Services

    9.44% overvalued

    2.58% undervalued

    Computer and Technology

    7.02% overvalued

    6.26% undervalued

    Construction

    3.56% overvalued

    9.59% undervalued

    Consumer Discretionary

    5.51% overvalued

    5.05% undervalued

    Consumer Staples

    8.28% overvalued

    1.87% undervalued

    Finance

    5.40% overvalued

    5.16% undervalued

    Industrial Products

    8.53% overvalued

    8.23% undervalued

    Medical

    4.96% overvalued

    6.17% undervalued

    Multi-Sector Conglomerates

    13.79% overvalued

    16.35% overvalued

    Oils-Energy

    16.00% overvalued

    3.81% undervalued

    Retail-Wholesale

    5.50% overvalued

    4.47% undervalued

    Transportation

    8.46% overvalued

    0.65% overvalued

    Utilities

    11.04% overvalued

    2.20% overvalued

    sp500

    1363.61

    1267.64

     

     

    Of course, no market prognosticator is right 100% of the time, if they were, they would be too busy making money to provide others with the benefit of their wisdom. But in this case, Suttmeier made another good and timely call.

    Stocks: ABEV, CALD, RNWK, CALX, AMSC, RMBS, TLAB, JBL, DELL, KLAC, STM, ALU, TDY, EGHT, MSTR, MSPD, N
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