VALUATION WATCH: Overvalued stocks now make up 43.24% of our stocks assigned a valuation and 14.84% of those equities are calculated to be overvalued by 20% or more. Six sectors are calculated to be overvalued.LUV Rules (Still) --ValuEngine: Southwest Airlines Remains Top S&P500 Stock
ValuEngine tracks more than 7000 US equities, ADRs, and foreign stock which trade on US exchanges as well as @1000 Canadian equities. 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 2800 stocks in our US Universe.
We also use trading data to provide forecast estimates for a variety of time horizons for almost ever equity in our database. Our Buy/Sell/Hold recommendations are based upon the 1-year forecast return figure. Using valuation and forecast figures, you can rank and rate our covered stocks against each other, to find out, in an objective and systematic way, the most attractive investment targets based on your own risk/reward parameters. We re-calculate the entire database every trading day, so you are assured that every proprietary valuation and forecast datapoint is as up-to-date as possible.
We can use our data to track individual stocks, industries, sectors, and indices. For today's bulletin, we present key metrics for the top picks in the S&P 500. The companies listed below represent the top-ten BUY/STRONG BUY stocks within the index. They are presented below according to their one-month forecast target prices.
The last time we looked at the S&P 500 was June 2nd. Since then, we have had a 40% turnover in our list. Traveler's has declined yet again as newcomer Michael Kors (NYSE:KORS) debuts in the number two position. Chubb Limited (NYSE:CB) has moved up one spot. Tyson (NYSE:TSN), DR Horton (NYSE:DHI), and Global Payments (NYSE:GPN) have also declined. Other newcomers also include KLA-Tencor (NASDAQ:KLAC), Aflac (NYSE:AFL), and Verizon (NYSE:VZ). Southwest Airlines (NYSE:LUV) retains its number one spot.
|Ticker||Company Name||Market Price||Valuation||Last 12-M Retrn||1-M Forecast Retn||1-Yr Forecast Retn||P/E Ratio||Sector Name||June 2, 2016|
|KORS||MICHAEL KORS||50.8||-21.49%||7.31%||1.15%||13.89%||11.64||Consumer Discretionary||TRV|
|TSN||TYSON FOODS A||62.68||0.97%||44.99%||1.11%||13.32%||15.60||Consumer Staples||DHI|
|DHI||D R HORTON INC||30.79||-1.87%||11.64%||0.95%||11.45%||13.87||Construction||CB|
|KLAC||KLA-TENCOR CORP||74.3||-2.38%||27.64%||0.94%||11.28%||17.76||Computer and Technology||GPN|
|GPN||GLOBAL PAYMENTS||74.26||-45.35%||38.56%||0.94%||11.25%||25.26||Business Services||FSLR|
NOTE: New stocks are in BOLD
Below is today's data on our SP500 leader, Southwest Airlines :
Southwest Airlines is a major domestic airline that provides primarily shorthaul, high-frequency, point-to-point, low-fare service. Southwest operates over Boeing 737 aircraft in numerous cities. Southwest has the lowest operating cost structure in the domestic airline industry and consistently offers the lowest and simplest fares. Southwest also has one of the best overall Customer Service records.
VALUENGINE RECOMMENDATION: ValuEngine continues its STRONG BUY recommendation on SOUTHWEST AIR for 2016-06-22. Based on the information we have gathered and our resulting research, we feel that SOUTHWEST AIR has the probability to OUTPERFORM average market performance for the next year. The company exhibits ATTRACTIVE Company Size and Sharpe Ratio.
|Valuation & Rankings|
|Valuation||18.08% undervalued||Valuation Rank(?)||73|
|1-M Forecast Return||1.37%||1-M Forecast Return Rank||100|
|12-M Return||15.72%||Momentum Rank(?)||84|
|Sharpe Ratio||0.92||Sharpe Ratio Rank(?)||96|
|5-Y Avg Annual Return||25.57%||5-Y Avg Annual Rtn Rank||96|
|Expected EPS Growth||8.23%||EPSGrowth Rank(?)||39|
|Market Cap (billions)||27.33||Size Rank||96|
|Trailing P/E Ratio||10.35||Trailing P/E Rank(?)||89|
|Forward P/E Ratio||9.56||Forward P/E Ratio Rank||83|
|PEG Ratio||1.26||PEG Ratio Rank||36|
ValuEngine Market Overview
|Summary of VE Stock Universe|
|Stocks Undervalued by 20%||25.04%|
|Stocks Overvalued by 20%||14.84%|
ValuEngine Sector Overview
|Sector||Change||MTD||YTD||Valuation||Last 12-MReturn||P/E Ratio|
|Consumer Staples||-0.10%||1.01%||6.03%||9.57% overvalued||2.23%||23.71|
|Basic Materials||-0.48%||3.52%||33.40%||9.16% overvalued||20.13%||28.65|
|Multi-Sector Conglomerates||0.03%||-0.21%||4.25%||3.18% overvalued||-8.86%||17.93|
|Industrial Products||-0.19%||0.13%||5.72%||2.13% overvalued||-9.92%||21.74|
|Computer and Technology||-0.77%||-0.52%||5.24%||1.42% undervalued||-9.68%||27.78|
|Business Services||0.31%||-0.64%||8.19%||2.89% undervalued||-10.28%||22.81|
|Consumer Discretionary||-0.26%||-0.49%||2.37%||3.13% undervalued||-12.98%||22.35|
ValuEngine.com is an independent research provider, producing buy/hold/sell recommendations, target price, and valuations on over 7,000 US and Canadian equities every trading day.
Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.