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Warning Flags Fly, But Stock Top Unconfirmed

Stocks in this article: AMZN BA F GM

I began to be concerned about the leadership of the Dow transportation average and on March 18 I wrote, 12 Sell Downgrades Threaten Dow Transports. This average peaked the next day setting an all time high at 6291.65, up 18.6% for 2013. Now after a sell-off transports are up 12.0% year to date. The transportation sector is 12.2% overvalued. Among the 186 stocks in this sector there are only four buy rated names and 146 stocks or 78.5% rated sell or strong sell. This sector remains "avoid-source of funds" rated.

On March 21, I wrote Sell-Rated Stocks a Source of Funds and here's a quick update of some of the stocks profiled that day:

Amazon (AMZN) ($259.42 vs. $257.28 on March 21) had a sell rating when the stock tested $277.40 on March 12 and today the stock has been downgraded to strong sell with the stock 5.0% overvalued and with a one-year price target at $224.94. The stock has a 12-month forward P/E of 152.6 and trades at 20.8 times book value. I show semiannual and annual value levels at $241.23 and $226.80 with a quarterly risky level at $278.28 vs. the all-time high of $284.72 set on Jan. 15. Amazon reports quarterly results on April 25 and is expected to earn 10 cents per share.


Boeing (BA) ($86.12 vs. $85.37 on March 21) had a sell rating, but was upgraded to hold shortly the March 21 post. Boeing reports quarterly results pre-market on April 24 and is expected to earn $1.47 per share. My monthly value level is $77.99 with annual and semiannual risky levels at $88.82 and $89.98 vs. the multi-year high at $89.46 set on April 11. Buy-and-trade investors could have booked profits on that strength between $88.82 and $89.98.

Ford Motor (F) ($12.75 vs. $13.36 on March 21) still has a sell rating and reports its quarterly results pre-market on April 24 and is expected to earn 41 cents per share. My quarterly value level is $8.51 with a monthly risky level at $14.45.

General Motors (GM) ($28.98 vs. $29.10 on March 21) still has a sell rating and reports quarterly results pre-market on May 2 and is expected to earn 63 cents per share. My annual value level is $20.40 with a monthly risky level at $32.55.

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