NEW YORK (TheStreet) -- This week's earnings includes five key names representing four important overvalued sectors. We have an aluminum company and an agricultural products company in the basic materials sector, which is 4.6% overvalued.
We have an alcoholic beverage company in the consumer staples sector, which is the most overvalued sector by 24.4%. We have a heavy construction materials company in the construction sector, which is the second most overvalued sector by 19.4%. Finally, on Friday morning we get earnings from one of the four "too big to fail" money center banks with the finance sector overvalued by 13.5%.
Three of the five stocks profiled today are overvalued, one by a whopping 68.5%. Three have buy ratings according to www.ValuEngine.com and two have hold ratings. One is slightly lower over the past 12 months, while four had significant double-digit gains. Two of these gainers are up by slightly more that 79%, which is another sign that the earnings bar is set quite high.
The upside for these stocks over the next 12 months is disappointing versus the past year as the biggest potential gain is only 11.7%, and one of the biggest gainer is expected to be slightly lower. Two of the five have elevated trailing 12 month price-to-earnings ratios. All five stocks are significantly above their 200-day simple moving averages, which is the downside risk in 2013 on what many on Wall Street call a reversion to the mean.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV