At www.ValuEngine.com we show that the Finance sector is 14.6% overvalued, with the Foreign Banks industry 7.3% overvalued. All five stocks in today’s table have complete ValuEngine data and have enough price data to have most value levels, risky levels and pivots.
BBVA Banco Franc (BFR) – has been below $10 since the week of August 12, 2011. Banco Santander S.A. (BSBR) – has been below $10 since the week of March 30, 2012. Grupo Financiero Galicia S.A. (GGAL) – has been below $10 since the week of November 4, 2011. Societe Generale Group (SCGLY) – had been below $10 since the week of August 12, 2011. Sumitomo Mitsui Financial Group Inc. (SMFG) – has been below $10 since the week of October 31, 2008.
Reading the Table
OV / 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. The most undervalued stock is BFR by 70.1%. The most overvalued stock is SCGLY by 92.9%.
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. We have five Hold rated stocks.
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 over the past twelve months! The biggest winner over the last twelve months is SCGLY with a gain of 56.3%. The biggest loser was BFR with a loss of 22.1%.
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. All five are projected to have just modest gains of 0.45 to 4.9% over the next twelve months.
P/E Ratios – Four out of five stocks have single-digit twelve month trailing P/E ratios.
Value Level: is the price at which to enter a GTC Limit Order to buy on weakness. The letters mean; W-Weekly, M-Monthly, Q-Quarterly, S-Semiannual and A- Annual.
Pivot: A level between a value level and risky level that acts as a magnet during the time frame noted.
Risky Level: is the price at which to enter a GTC Limit Order to sell on strength.
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.