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Amazon, Apple and Google Now Overvalued

NEW YORK (TheStreet) -- The high-flyers Amazon (AMZN) and Apple (AAPL) began the week setting new all time highs at $260.00 and $683.29 respectively. Google (GOOG) set a multi-year high at $712.81 vs. its all time high at $747.24, set during the week of Nov. 9, 2007.

Will Apple see an even higher high today as Apple enthusiasts await the announcement of the iPhone 5?

Amazon reached its new all-time high Monday as the company revealed that their high-definition 7-inch Kindle Five will begin being shipped this week, and that other models will ship in November.

Meanwhile, Google won the race against Apple to reach $700 a share, and this morning we learned that a half a billion Android devices have been activated around the world.

With the S&P 500 setting new multiyear highs this week, and with the yield on the U.S. Treasury 30-Year bond rising to 2.91% this morning, www.ValuEngine.com shows that valuations are becoming less undervalued and more overvalued then they were at the June 4 low for the S&P 500.

ValuEngine shows that 55% of all stocks are undervalued down from 81% on June 4. Twelve of 16 sectors are now overvalued: utilities by 15.9%, retail-wholesale by 11.5%, finance by 11.1%, consumer staples by 11.1% and medical by 10.9%. Back on June 4, 14 of 16 sectors were undervalued. The yield on the 30-year bond was 47 basis points lower on June 4 at a record low of 2.44%.

Even the "go-go" momentum names are affected by these metrics, but this morning all three remain "4-Engine" Buy rated according to www.ValuEngine.com. These names have become overvalued fundamentally, and are also overbought technically on their weekly charts.

When I see this type of pattern develop, I advise investors to book profits by paring positions and then employ "but and trade" strategies moving forward on these names as long as they maintain their buy ratings.

Amazon.com (AMZN) ($255.67) is rated Buy according to ValuEngine with fair value at $163.62, which makes the stock 56.3% overvalued. The ValuEngine one-year price target is $268.58. Amazon is up 21.0% over the past 12 months, and is on the cusp of a downgrade to Hold. The stock has a crazy P/E ratio at 164 times 12-month forward analysts' estimates.

My semiannual value level is $236.23 with a monthly risky level at $266.82. The daily chart below shows overbought momentum with the stock well above its 21-day, 50-day and 200-day simple moving averages at $244.98, $234.39 and $206.22.



Courtesy of Thomson Reuters

Stock quotes in this article: AMZN, AAPL, GOOG 

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