Earnings previews, including Chevron, Exxon, P&G
These 9 stocks climbed 7% to 96% in the past 12 months, but don't expect gains like that in the next 12 months.
Stocks should have a volatile week given the mix of earnings reports, economic data and the Federal Open Market Committee decision. Today I am profiling nine companies that report earnings on Thursday and Friday, including three more Dow components.
Before I do, this morning's big news was that Apple (AAPL) ($447.79) has been downgraded to "hold" from "buy," according to www.ValuEngine.com. The cause of this downgrade is that the stock's upside over the next 12 months fell to 3.9% following Monday's rally of $6.80. Apple remains undervalued, but just by 2.2%, and is down 24.7% over the last 12 months. The 12 month forward price-to-earnings ratio remains reasonable at 10.9. The weekly chart profile is positive with the stock above its five-week modified moving average at $432.12, after holding its 200-week simple moving average at $386.52 at the end of June. Apple is trading between annual pivots at $421.05 and $510.64.
The stock market continues to trade under a ValuEngine valuation warning with 76.0% of all stocks overvalued, 43.5% are overvalued by 20% or more. 15 of 16 sectors are overvalued, 14 by double-digit percentages.
Among the nine stocks profiled today, seven are rated "hold" and two are rated "buy." All are overvalued by 8% to 40.8% with gains of 6.5% to 95.5% over the last 12 months. None are expected to match these performances over the next 12 months. Seven are above their 200-day simple moving averages reflecting the risk of reversion to the mean.
Here is my table of data for the nine stocks reporting results on Thursday and Friday.
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.
Beazer Homes (BZH) ($17.19) set a multi-year high at $23.29 on May 20, and has been trading back and forth around its 200-day SMA at $17.22 since June 21. My weekly value level is $15.79.
Cardinal Health (CAH) ($50.58) set a multi-year high at $51.09 on July 26. This "buy"-rated stock has a semiannual value level at $43.56 with a semiannual pivot at $51.18.
Chevron (CVX) ($126.17) set a multi-year high at $127.83 on July 25. My annual value level is $123.08 with a semiannual risky level at $132.79.
Linkedin (LNKD) ($203.71) set a multi-year high at $209.39 on July 29. My monthly pivot is $205.78 with a weekly risky level at $211.54.
Mohawk Industries (MHK) ($114.60) set a multi-year high at $120.70 on May 14 then traded as low as $103.74 on June 4. My semiannual value level is $109.94 with a weekly pivot at $115.36 and monthly risky level at $126.37.
Procter & Gamble (PG) ($80.09) set a multi-year high at $82.54 on April 23 then traded as low as $75.10 on June 20. This buy rated Dow component has an annual value level at $75.13 with an annual pivot at $78.73 and semiannual risky level at $81.86.
Public Storage (PSA) ($159.59) set a multi-year high at $168.66 on May 22 then traded as low as $145.04 on June 20. My annual value level is $149.89 with a weekly pivot at $161.23 and quarterly risky level at $168.55.
Vulcan Materials (VMC) ($47.93) set a multi-year high at $59.48 on Jan. 22 then traded as low as $45.42 on April 15. My weekly value level is $46.53 with a semiannual pivot at $47.42 and a quarterly risky level at $49.74.
Exxon Mobil (XOM) ($94.03) set a multi-year high at $95.49 on July 23. My quarterly value level is $91.62 with a weekly pivot at $94.33 and annual risky level at $105.52.
At the time of publication the author held no positions in any of the stocks mentioned.
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4 analysts downgrade the stock the day after a disappointing quarterly report.
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