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Computers And Tech Stocks And Market Valuation Levels From ValuEngine.com

|Includes: AMD, BlackBerry Ltd. (BBRY), CKSW, CRAY, CYOU, DELL, HPQ, IQNT, N, NIHD, QRVO, ROVI, TNAV, TSM

VALUATION WARNING: Our models find that overvaluation is at levels typically seen when market pullbacks occur. Overvalued stocks now make up 77% of our stocks assigned a valuation and 46% of those equities are calculated to be overvalued by 20% or more. 15 of 16 sectors are calculated to be overvalued--13 of them by double digits.

MARKET OVERVIEW

 

 

Summary of VE Stock Universe

 

 

Stocks Undervalued

22.95%

Stocks Overvalued

77.05%

Stocks Undervalued by 20%

9.73%

Stocks Overvalued by 20%

46.31%

SECTOR OVERVIEW

Sector

Change

MTD

YTD

Valuation

Last 12-MReturn

P/E Ratio

Aerospace

0.84%

0.87%

27.89%

22.20% overvalued

32.00%

18.2

Auto-Tires-Trucks

0.96%

1.05%

41.16%

26.99% overvalued

46.70%

18.89

Basic Materials

0.03%

0.13%

2.42%

5.88% undervalued

-21.53%

20.04

Business Services

1.14%

1.23%

76.40%

18.10% overvalued

25.72%

24.25

Computer and Technology

1.38%

1.54%

29.03%

22.77% overvalued

25.97%

30.48

Construction

1.03%

1.12%

33.19%

13.78% overvalued

36.84%

25.54

Consumer Discretionary

1.15%

1.23%

30.70%

25.55% overvalued

30.99%

24.7

Consumer Staples

0.84%

0.92%

18.08%

22.85% overvalued

22.19%

21.53

Finance

0.62%

0.68%

26.92%

20.63% overvalued

18.69%

17.94

Industrial Products

1.28%

2.72%

37.04%

18.52% overvalued

29.35%

20.96

Medical

0.90%

1.06%

202.57%

20.29% overvalued

23.41%

25.81

Multi-Sector Conglomerates

1.35%

1.40%

8.62%

12.00% overvalued

17.16%

17.24

Oils-Energy

0.52%

0.65%

26.43%

5.79% overvalued

7.50%

27.82

Retail-Wholesale

1.31%

1.43%

36.16%

25.75% overvalued

39.46%

23.22

Transportation

1.60%

1.66%

27.12%

15.66% overvalued

23.25%

21.95

Utilities

0.65%

0.78%

18.48%

10.70% overvalued

11.20%

20.64

ValuEngine Newsletters Latest Results

VE Newsletter

Current Month Total

S&P 500

Last Month Total

S&P 500

Since Inception

S&P 500

Forecast MNS

1.11

1.45

3.56

2.62

91.13

84.17

Dividend Stock

0.89

0.67

8.47

6.76

8.47

6.76

Small Cap Stock

-2.80

0.86

13.82

3.9

39.26

22.03

View

2.58

1.83

4.51

1.48

75.27

48.02

Sector Talk-Computers and Technology

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

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

Ticker

Name

Mkt Price

Valuation(%)

Last 12-M Retn(%)

BBRY

BLACKBERRY LTD

8.76

27.93

23.09

IQNT

INTELIQUENT INC

8.11

-14.15

-39.79

AMD

ADV MICRO DEV

3.81

-30.61

-5.93

TQNT

TRIQUINT SEMICO

8.01

-20.07

43.04

TNAV

TELENAV INC

6.13

294.76

8.11

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

Ticker

Name

Mkt Price

Valuation(%)

Last 12-M Retn(%)

BBRY

BLACKBERRY LTD

8.76

27.93

23.09

IQNT

INTELIQUENT INC

8.11

-14.15

-39.79

AMD

ADV MICRO DEV

3.81

-30.61

-5.93

TQNT

TRIQUINT SEMICO

8.01

-20.07

43.04

TNAV

TELENAV INC

6.13

294.76

8.11

Top-Five Computers and Technology Sector Stocks--Composite Score

Ticker

Name

Mkt Price

Valuation(%)

Last 12-M Retn(%)

HPQ

HEWLETT PACKARD

26.23

4.02

48.53

ROVI

ROVI CORP

19.43

-36.13

44.89

CYOU

CHANGYOU.COM

33.17

8.11

66.1

TSM

TAIWAN SEMI-ADR

17.25

-0.27

24.28

DELL

DELL INC

12.95

-0.12

9.88

Top-Five Computers and Technology Sector Stocks--Most Overvalued

Ticker

Name

Mkt Price

Valuation(%)

Last 12-M Retn(%)

CRAY

CRAY INC

28.2

300

148.02

NIHD

NII HLDGS-CL B

6.71

300

-5.23

TNAV

TELENAV INC

6.13

294.76

8.11

N

NETSUITE INC

97.77

248.43

83.02

CKSW

CLICKSOFTWARE

7.3

226.64

-2.28

Market Valuation Reaches High Levels, Valuation Warning Continues

The ValuEngine Valuation Model tracks more than 7000 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. Whenever we see levels in 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. At that time, the S&P was at 1625.

As of yesterday's close, we now calculate that 77% of stocks are overvalued and 46% of stocks are overvalued by 20% or more. These levels represent some of the highest we have ever tracked. These sorts of market overvaluation and overvalued by 20% or more figures exceed levels which have been correlated with market pull backs in the past. Two factors can lower them, a market pullback, or a rise in earnings and EPS estimates. The markets have been on quite a tear to the upside all Summer, so unless the market embarks on a downward leg and/or companies begin bigger earnings and analysts adjust their EPS estimates, we expect to see these figures remain high.

Investors are reminded to remain cautious against a move to the downside.
Keep a close eye on the market and consider booking some profits.

The chart below tracks the valuation metrics from January 2013 until today.

This chart shows overall universe under and over valuation in excess of 50% vs the S&P 500 from June 2012 to the present.

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

In addition to the overall valuation metrics, we see that on a sector basis 15 of 16 sectors are calculated to be overvalued. In the past, our Chief Market Strategist Richard Suttmeier has used the sector valuation figures to buttress his macro market calls. This is another indicator that investors should consider implementing additional risk management tools and/or booking some profits.

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