This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Retail Bubble Stocks Play On Earnings Momentum

NEW YORK ( TheStreet) -- It is very unusual for retail stocks to be a play on momentum, but that's what has happened this year to a dozen retailers that I describe as bubble stocks.

Nine are in the retail-wholesale sector which is 7.2% overvalued according to www.ValuEngine.com. Two are in the consumer staples sector which is the most overvalued sector by 13.9%. These 12 stocks are in consumer discretionary which is 2.8% undervalued.

On Oct. 17 I wrote Analyzing the Retail Stock Bubble and since then there have been two downgrades. One set a new all-time high on Wednesday and another, the archrival of the other, is set for a new multi-year high today. This second one is the only retailer in the dozen that is still shy of its all-time high.

Four stocks are overvalued, six have trailing 12 month price-to-earnings ratios above 20.0, nine have gains of more than 25% over the last twelve months, but none are projected to match these past gains over the next 12 months.

Ten of the twelve retailers are above their 200-day simple moving averages.

The Conference Board's reading on consumer confidence rose to 73.7 in November was the highest reading since February 2008, but keep in mind that this is well below the neutral zone of 90 to 110 for this measure.

Chart Courtesy of dshort -- Advisor Perspectives

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.
1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
AMZN $535.25 -0.28%
COST $145.39 0.06%
HD $117.14 0.58%
UA $99.19 -0.09%
WMT $71.84 -0.44%

Markets

Chart of I:DJI
DOW 17,713.18 -32.80 -0.18%
S&P 500 2,110.28 +1.65 0.08%
NASDAQ 5,143.1990 +14.4140 0.28%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs