Retail Earnings at the Mall
On Monday I profiled eight larger retailers in Wal-Mart, Target, Home Depot Report Earnings This Week. Each of these stocks are also buy rated and Home Depot (HD) reported their quarterly results pre-market on Tuesday. The home improvement giant comfortably beat earnings estimates on both the top and bottom line. The stock set a new multi-year high at $64.44 in reaction to this report, so the stock continues its mojo run with an overbought weekly chart. As long as closes are above my monthly pivot at $62.76 the upside is to its all time bubble top of $70 set in April 2000.
All nine stocks I profile today are in the retail-wholesale sector which is 4.3% overvalued according to ValuEngine. Apparel and shore retailers are 3.5% undervalued and miscellaneous/diversified stores are 11.2% overvalued.
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.
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 twelve 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 twelve months. Stocks with a black number in the Table are projected to move higher by that percentage over the next twelve months.
Value Level: 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 should be a magnet during the time frame noted.
Risky Level: is the price at which to enter a GTC limit order to sell on strength.
Investors and traders should employ a buy-and-trade strategy between value level and risky level.
Retailers reporting earnings results after the close today:
Hot Topic (HOTT) ($8.50): Has a buy rating with an elevated price-to-earnings ratio. The stock is below its 200-day simple moving average at $9.38. The weekly chart is negative with the five-week modified moving average at $8.83 and the 200-week SMA at $7.49.