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ValuEngine Weekly June 17,2011

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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.