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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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  • APPLE Getting BEATS, Construction, Valuations, And More From ValuEngine 0 comments
    May 9, 2014 3:16 PM | about stocks: MTH, MDC, UFPI, MHO, RYL, CBI, LII, WGO, CX, TPC, FWLT, OESX, URI, AAPL

    VALUATION WARNING: Our models find that overvaluation is at levels typically seen when market pullbacks occur. Overvalued stocks now make up 69.56% of our stocks assigned a valuation and 26.6% of those equities are calculated to be overvalued by 20% or more. Eleven sectors are calculated to be overvalued by double digits.

    ValuEngine Index Overview

     

     

     

     

     

    IndexWeek OpenThurs. CloseChange% ChangeYTD
    DJIA16509.7516550.9741.220.25%-0.41%
    NASDAQ4099.254051.5-47.75-1.16%-3.57%
    RUSSELL 20001122.221097.43-24.79-2.21%-5.85%
    S&P 5001879.451875.63-3.82-0.20%1.02%

     

    ValuEngine Market Overview

     

     


     

    Summary of VE Stock Universe
    Stocks Undervalued30.44%
    Stocks Overvalued69.56%
    Stocks Undervalued by 20%9.13%
    Stocks Overvalued by 20%26.6%
    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

    Apple Inc. is engaged in designing, manufacturing and marketing mobile communication and media devices, personal computers, and portable digital music players. The Company's products and services include iPhone, iPad, Mac, iPod, Apple TV, a portfolio of consumer and professional software applications, the iOS and Mac OS X operating systems, iCloud, and a range of accessory, service and support offerings. It sells its products worldwide through its online stores, its retail stores, its direct sales force, third-party wholesalers, and resellers. Apple Inc. is headquartered in Cupertino, California.

    Today's WSJ features news on the company noting the proposed acquisition of Beats Electronics LLC for @$3.2 billion. This isn't a headphone play. Analysts note that the company is finally making a foray into subscription-based music streaming. The company's iTunes store for music sales has been faltering of late as streaming services such as Pandora and Spotify have become more prominent in the market. If the deal goes through, it would be Apple's largest acquisition so far.

    ValuEngine continues its HOLD recommendation on APPLE INC for 2014-05-08. Based on the information we have gathered and our resulting research, we feel that APPLE INC has the probability to ROUGHLY MATCH average market performance for the next year. The company exhibits ATTRACTIVE Company Size but UNATTRACTIVE Book Market Ratio.

    As a bonus to our Weekly Newsletter readers,
    we are offering a FREE DOWNLOAD of one of our Stock Reports

    Read our Complete Detailed Valuation Report on Apple HERE.

    Sector Talk--Construction

    Below, we present the latest data on Construction 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.

    Please Click Here to Download a FREE Demo of ValuEngine's Professional VEI Software Package.

    Top-Five Construction Stocks--Short-Term Forecast Returns

     

     

     

     

     

     

    TickerNameMkt PriceValuation(%)Last 12-M Retn(%)
    MTHMERITAGE HOMES39.23-19.36-23.27
    MDCMDC HLDGS27.69-21.96-26.63
    UFPIUNIVL FST PRODS49.53-12.3427.29
    MHOM/I HOMES INC21.41-23.11-18.96
    RYLRYLAND GRP INC37.7-10.66-20.08

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

     

     

     

     

     

     

    TickerNameMkt PriceValuation(%)Last 12-M Retn(%)
    MTHMERITAGE HOMES39.23-19.36-23.27
    MDCMDC HLDGS27.69-21.96-26.63
    UFPIUNIVL FST PRODS49.53-12.3427.29
    MHOM/I HOMES INC21.41-23.11-18.96
    RYLRYLAND GRP INC37.7-10.66-20.08

    Top-Five Construction Stocks--Composite Score

     

     

     

     

     

     

    TickerNameMkt PriceValuation(%)Last 12-M Retn(%)
    CBICHICAGO BRIDGE78.963.5138.33
    UFPIUNIVL FST PRODS49.53-12.3427.29
    LIILENNOX INTL INC83.710.4932.2
    WGOWINNEBAGO24.772.328.61
    MTHMERITAGE HOMES39.23-19.36-23.27

    Top-Five Construction Stocks--Most Overvalued

     

     

     

     

     

     

    TickerNameMkt PriceValuation(%)Last 12-M Retn(%)
    CXCEMEX SA ADR12.9545.514.14
    TPCTUTOR PERINI CP31.2444.8574.14
    FWLTFOSTER WHELR AG33.3238.0552.49
    OESXORION ENERGY SY4.6425.8193.2
    URIUTD RENTALS INC92.8924.1359.69

     

    What's Hot--Valuation Levels Dip to Lowest Levels Since July, 2013

    ValuEngine tracks more than 5000 US equities, ADRs, and foreign stock which trade on US exchanges. 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 3600 stocks.

    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 latest valuation warning on May 8th, 2013. At that time, the S&P was at 1625.

    As of yesterday's close, we now calculate that 69.5% of stocks are overvalued and 26.6% of those stocks are overvalued by 20% or more. These levels remain high, but the recent market pull back-- combined with changes in earnings and stock prices-- have resulted in figures that are now the lowest recorded since July 2013.

    If the figures continue the decline, we will remove our valuation warning. This does not mean we have a "buy" signal, just that valuations have declined into "normal" range. The current short-term concern is whether or not 2014 will bring us the typical "Sell in May and Go Away" pattern. The recovery seems to be on stronger ground when the recent labor figures are considered, but of course tensions in Ukraine remain high. Regardless, this has been a very long period with high levels of overvaluation.

    Subscribers Get FULL ACCESS to our Market and Sector Overviews

    The chart below tracks the valuation metrics from January 2014.

    (click to enlarge)

    This chart shows overall universe over valuation in excess of 65% vs the S&P 500 from January 2013

    (click to enlarge)

    This chart shows overall universe under and over valuation in excess of 50% vs the S&P 500 from March 2007*

    (click to enlarge)

    *NOTE: Time Scale Compressed Prior to 2011.

    In addition to the overall valuation metrics, we see that on a sector basis the declines in overvaluation have also relived some pressure. While ALL sectors remain overvalued according to our Valuation Model, only eleven of them remain calculated to be overvalued by double digits--with three more barely in the double-digit range. This is another indicator that the market is less overheated.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

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