Nine Stocks Take Trip to the Woodshed
From earnings misses and lowered guidance to civil charges from the Department of Justice.
From an alleged competitive advantages of transporting beers containing lime wedges on wagons pulled by Clydesdales.
From weaker demand for cable services to reduced attendance at health clubs.
From slower growth in Internet search in China to reduced eating of what should be yummy chicken in China.
And, from reduced demand for transportation logistics to the possibility that used video games might not be playable on new Xbox consoles.
The nine stocks that were taken to the woodshed are in six overvalued sectors according to www.ValuEngine.com: computer and technology is overvalued by 13.6%, consumer discretionary by 7.8%, consumer staples by 22.6%, finance by 16.8%, retail-wholesale by 11.2% and transportation by 20.9%. The nine stocks profiled are undervalued by 0.8% to 32.6%, however.
Buy-and-Trade Strategies for Today's Woodshed Stocks:
Baidu (BIDU) ($98.37) matched EPS estimates on Feb. 4 earning $1.28 per share, but China's Google warned investors about the pace of earnings growth. The stock was testing its 200-day simple moving average at $113.87 on Jan. 29 and traded as low as $95.30 on Feb. 5. BIDU has a buy rating with a neutral weekly chart profile with the five-week modified moving average at $104.32 and the 200-week SMA a key support at $95.21, which held at the low. My monthly value level is $88.02 with a monthly pivot at $100.84 and weekly risky level at $121.26.
CH Robinson Worldwide (CHRW) ($60.50) reported a 2 cents a share miss on EPS earning 68 cents per share on Feb. 6 and the stock fell from $67.01 at the Feb. 5 close to $60.01, just above its 200-day SMA at $59.87. CHRW has been downgraded to hold from buy this morning and has a negative weekly chart profile with the five-week MMA at $63.62 and the 200-week SMA at $63.77. My quarterly value level is $53.20 with an annual pivot at $60.96 and monthly risky level at $62.66.
Gamestop (GME) ($25.20) revealed that some used video games sold at the retailer would not work on the new Xbox game console and the stock dropped from a high of $27.01 on Feb. 5 to a low of $23.75 on Feb. 6. GME has been chopping around between $28.35 on Dec. 13 to $22.30 on Jan. 11, so the stock has been extremely volatile. GME has been bouncing off its 200-week SMA in recent weeks at $22.51 with a buy rating and influenced by a monthly value level at $24.16 and a quarterly pivot at $25.98.