NEW YORK ( TheStreet) -- As first quarter earnings season winds down I focus on six more earnings reports from retailers; five in the retail-wholesale sector and one in the consumer discretionary sector.
Last week I profiled 18 buy rated retailers in the retail-wholesale sector in two posts. A week ago on May 20 I wrote Home Depot, Lowes, Target Top Earnings List and I called these the front nine. Then on May 21 I wrote Buckle Up for More Retail Earnings covering what I called the back nine.
Tomorrow I will update my profiles for these 18 names focusing on naming the winners and losers. I will note today that two were downgraded to hold from buy according to ValuEngine.
In golf terms on the front nine there were five that beat EPS estimates or birdies, two that matched or pars, one that missed or a bogey, and one that did not report. Four under par is an excellent score.On the back nine there were six that beat EPS estimates or birdies, one that matched for a par, and two that missed or bogies. Four under par was another excellent score. As you will see in tomorrow's earnings scorecard for these 18 retail-wholesale stocks that despite mostly better than expected earnings, five moved sideways with the same dollar handle, eight traded lower, and only five traded higher mostly due to cautious comments, Among the six retailers reporting this week that I am profiling four have buy ratings and two have hold ratings in a market where 70.7% of all stocks are overvalued, 32.9% overvalued by 20% or more. The consumer discretionary sector is 18.5% overvalued and the retail-wholesale sector is the most overvalued sector by 24.2%.
Four of today's profiled retailers are overvalued by double-digit percentages and three have gained more than 30% over the last 12 months. The projected gains for the next 12 months show a maximum of just 7.0%. Four out of six have 12 month trailing P/E ratios above 24.0. Five of the six stocks are above its 200-day simple moving average (SMA) which reflects the risk of reversions to the mean.