11 Stocks Reporting Earnings this Week
We begin the week with 64% of all stocks overvalued, which is just a percent away from a ValuEngine Valuation Warning. We show 15 of 16 sectors overvalued. The overvalued sectors are; computer and technology by 14.3%, construction by 26.4%, consumer discretionary by 8.9%, consumer staples by 23.8%, finance by 18.0% and retail-wholesale by 11.2%. The basis industry sector is the only undervalued sector by just 0.9%.
All major averages have overbought readings for their 12x3x3 weekly slow stochastic readings, which is my favored measure of technical momentum.
When the fundamentals are overvalued and the weekly technicals are overbought, investors should be reducing allocations to stocks on strength. Investors who are long stocks I profiled today pre-earnings should thus employ a buy-and-trade strategy that results in raising cash on strength to risky levels.
Reading the Table
OV/UN Valued: Stocks with a red number are undervalued by this percentage. Those with a black number are overvalued by that percentage according to ValuEngine.
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.
Last 12-Month Return (%): Stocks with a red number declined by that percentage over the last 12 months. Stocks with a black number increased by that percentage.
Forecast 1-Year Return: Stocks with a red number are projected to decline by that percentage over the next 12 months. Stocks with a black number in the table are projected to move higher by that percentage over the next 12 months.
Value Level: 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 should be a magnet during the time frame noted.
Risky Level: Price at which to enter a GTC limit order to sell on strength.
Here are my buy-and-trade strategies for today's earnings stocks:
Reporting before the open on Wednesday Toll Brothers (TOL) ($37.08) is expected to earn 11 cents per share. The stock has a buy rating and set a multi-year high at $38.36 on Jan. 29. Toll Brothers is 25.1% overvalued and has gained 57.3% over the past 12 months and has an elevated trailing 12 months price-to-earnings ratio at 44.9. The weekly chart profile is positive with the five-week modified moving average at $35.59. My annual value level is $31.95 with a monthly pivot at $38.70 and weekly risky level at $39.40.