At www.ValuEngine.com we show that the Consumer Discretionary sector is 4.3% overvalued. The stocks I selected today are in the Movie/TV Production industry, which is 1.4% overvalued, the Textile industry which is 3.4% overvalued, and some miscellaneous discretionary names. All eight stocks have complete ValuEngine data and enough data to have a complete set of value levels, risky levels and pivots.
Crown Crafts, Inc. (CRWS) – has been below $10 for at least five years.
Joe’s Jeans Inc. (JOEZ) – has been below $4 for at least five years.
Kid Brands, Inc. (KID) – has been $10 since the week of July 4, 2008, but attempted to move back above $10 twice in 2010 after a low of $0.80 during the week of November 21, 2008.
Outdoor Channel Holdings, Inc. (OUTD) – was above $10 until the week of August 3, 2007.
RRSat Global Communications Network Ltd. (RRST) – was above $10 until the week of May 28, 2010.
Summer Infant, Inc. (SUMR) – has been below $10 for at least five years.
World Wrestling Entertainment Inc. (WWE) – was above $10 until the week of December 23, 2011.
Quiksilver Inc. (ZQK) – was above $10 until the week of July 11, 2008.
Reading the Table
V / UN Valued: The stocks with a red number are undervalued by this percentage. Those with a black number are overvalued by that percentage according to ValuEngine. BZH is the most undervalued by 59.1%. GFA is the most overvalued by 65.7%.
VE Rating: A “1-Engine” rating is a Strong Sell, a “2-Engine” rating is a Sell, a “3-Engine” rating is a Hold, a “4-Engine” rating is a Buy and a “5-Engine” rating is a Strong Buy. <P/> 3 stocks are rated Strong Sell, 5 are rated Sell, six are rated Hold, and only one, CX, is rated Buy.
Last 12-Month Return (%): Stocks with a Red number declined by that percentage over the last twelve months. Stocks with a Black number increased by that percentage. The best performer over the past twelve months is HOV with a gain of 262.1%. The worst performer over the past twelve months is SKY with a loss of 43.2%.
Forecast 1-Year Return: Stocks with a Red number are projected to decline by that percentage over the next twelve months. Stocks with a Black number in the Table are projected to move higher by that percentage over the next twelve months. The best projected gain is 6.8% CX. The worst projected loss is SKY 19.6%.
P/E Ratios: Only ICA has a reasonable P/E ratio, while the others don’t have one, or the P/E ratio is extremely elevated.
Where to Buy and Where to Sell
A “Value Level” is a price at which buyers should add to positions on market price weakness. A “Risky Level” is a price at which sellers should reduce holdings on market price gains. A “Pivot” is a support or resistance (Value Level or Risky Level) that was violated in its time horizon, acting as a magnet during the remainder of that time horizon. These levels are calculated in weekly (W), monthly (M), quarterly (Q), semiannual (S) and annual (A) time horizons, based on the past nine closes in each time horizon. My theory is that the closes over a nine-year period are the summation of all bullish and bearish events for that market or specific stock. These levels are the most important element of my Buy and Trade Strategy.
Buy and Trade Guidelines
Investors should consider entering good until cancelled (GTC) orders to buy weakness to a value level, or to sell strength to a risky level.
