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TheStreet Open House

Woodshed Stocks Face Another Valuation Warning

Bankrate (RATE) ($10.48) missed EPS estimates by 6 cents a share and the stock plunged from $12.38 on Feb. 12 to $9.90 on Feb. 13. The stock has a hold rating with a negative weekly chart profile and the five-week MMA at $11.78. My weekly value level is $7.77.

Rackspace Hosting (RAX) ($57.74) missed EPS estimates by $0.01 on Feb. 12 and the stock crashed from $74.98 to a low of $56.81 on Feb. 19. The stock is rated a hold with a negative weekly chart profile and the five-week MMA at $68.53. My weekly risky level is $71.87.

Constellation Brands (STZ) ($43.28) declined to as low as $28.37 on Jan. 31 on the possibility that the Department of Justice would block the merger that combined a Bud with a Corona. Then on Feb. 14 the DOJ favored a new agreement that would not spoil this blend. The stock surged from behind the woodshed to $44.20 on Feb. 15. With a strong buy rating, the strategy was to buy weakness to a value level and my annual and semiannual value levels are $30.65 and $29.94. Today my weekly value levels is $34.83 with my monthly risky level at $45.57.

Constellation Brands was profiled as a woodshed stock on Feb. 7 in, Nine Stocks Take Trip to the Woodshed as these value levels were being tested.

Ultra Salon Cosmetics (ULTA) ($85.68) declined from $99.49 on Feb. 14 to $83.45 on Feb. 19 on the resignation of the company's CEO. The stock has a buy rating and a negative weekly chart profile and the five-week MMA at $93.38. My semiannual value level is $81.28 with a weekly risky level at $92.83.

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