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Semiconductor Stocks Lead First-Half Performance Leaders

NEW YORK ( TheStreet) -- The 30 stocks in the PHLX Semiconductor Sector Index (^SOX) were the biggest percentage gainers in the first half of 2013. The SOX continued higher after the five major averages peaked on May 20/May 22 setting a new multi-year high at 482.06 on June 19, up 25.5% on the year at that time. Tuesday's close had the SOX up 20.4% year to date versus 11.3% for the S&P 500 and 10.9% for the tech heavy Nasdaq.

Fundamentally the stock market remains under a ValuEngine valuation warning with 68.7% of all stocks overvalued. We still show that 15 of 16 sectors are overvalued, 12 by double-digit percentages. We also show that 31.0% of all stocks are overvalued by 20% or more.

The computer and technology sector is the most overvalued by 21.8%. Among the semiconductor industries, analog and mixed semis are 10.4% overvalued, communication semis are 9.6% overvalued, equipment wafer semis are 26.2% overvalued and general semis are 37.0% overvalued.

There was better than expected economic data on Tuesday, which helped the stock market rebound. Durable Goods Orders were stronger than expected as was New Home Sales and Consumer Confidence. But keep in mind that these data points were compiled before last Wednesday's FOMC meeting and the game changing idea that quantitative easing moves would be tapered off sooner rather than later.

Most notably the Conference Board's reading on Consumer Confidence rose to 81.4 in June up from 74.3 in May. While this reading is the best since the recession ended, confidence remains below the neutral range of 90 to 110 for this release.

Among the 30 semiconductor stocks in the SOX, 26 are overvalued and four are undervalued. Five are rated buy and 25 are rated hold, with one downgrade to hold and one upgrade to buy this morning. Six stocks have lost ground over the last 12 months while 23 have gained, with 18 gaining between 11.6% and 159.1%.

The 12-month projections show a potential loss of 3.9% to a potential gain of 6.6%. Only two stocks have single-digit 12-month trailing EPS. There are 15 stocks with a price-to-earnings ratio above 20.0. There are 25 stocks that are trading above their 200-day simple moving averages.
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