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Positive Earnings in Overvalued Market

NEW YORK ( TheStreet) -- Earnings winners continued on Thursday with more beats than misses. But this week we also observed that all stocks are not created equal in an extremely overvalued market. Stocks that missed earnings estimates or offered cautious outlooks can get their share price severely cut in a move to behind the investor woodshed.

I did not realize that potash prices were controlled by cartels similar to OPEC in the oil market. This week companies that produce fertilizer took a major hit on a glut of the ingredient called potash. Wholesale potash prices have been falling since mid-2009, so when a dominating potash cartel collapsed, the industry got hit hard on a potential price war. The three names I profile today were taken to the woodshed on Tuesday on this news.

On July 30 I profiled nine stocks in, Apple Downgraded, Chevron, Exxon and P&G Earnings Preview Apple Downgraded, Chevron, Exxon and P&G Earnings Preview where I profiled eight stocks that reported results on Aug. 1. The ninth Chevron (CVX - Get Report) ($126.44) reports results premarket this morning.

Beazer Homes (BZH - Get Report) ($17.01) beat EPS estimates by 13 cents with a loss of 22 cents a share. The homebuilder has been hovering above its July 5 low at $16.48. My weekly value level is $15.79 with a monthly risky level at $19.71.

Cardinal Health (CAH - Get Report) ($51.09) beat EPS estimates by 2 cents earning 79 cents a share. This retail-wholesale stock set a new multi-year high at $51.33 on Aug. 1. My semiannual value level is $43.56 with monthly and semiannual pivots at $50.97 and $51.18.

Linkedin (LNKD - Get Report) ($213.00) beat EPS estimates by 3 cents earning 7 cents a share. This social media stock traded up to a new all time high at $228.80 in the afterhours vs. my new monthly risky level at $231.49.

Mohawk Industries (MHK - Get Report) ($121.29) beat EPS estimates by 18 cents earning $1.84 a share. This consumer discretionary stock traded up to $131.50 in afterhours trading versus my monthly risky level at $132.63.
[Read: <a target="blank" data-add-tracking="true" href=""><em>Kodak's Bankruptcy: Manufacturing a 21st Century Rebirth</em></a>]

Procter & Gamble (PG - Get Report) ($81.64) beat EPS estimates by 2 cents earning 79 cents a share. The reaction high on August 1 was $82.23 vs. the May 24 high at $82.35 and the April 23 high at $82.54. This Dow component has annual value levels at $78.73 and $75.13 with semiannual and monthly risky levels at $81.86 and $82.93.
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BZH $14.53 1.04%
CAH $86.98 0.25%
CVX $90.87 -0.53%
MHK $193.16 0.31%
LNKD $245.66 -0.51%


Chart of I:DJI
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