NEW YORK ( TheStreet) -- The retail-wholesale sector may be 24.9% overvalued according to www.ValuEngine.com, but this sector of 360 companies has 80% of the stocks rated buy. With an overweight sector rating I decided to profile nine buy-rated stocks in the retail-wholesale sector that are trading below $10 a share.
All nine stocks profiled today are overvalued, six by more than 40%. Only one is lower in price over the last 12 months, while the others are up between 22.4% and 227.7%. Seven of nine are above their 200-day simple moving average, which reflects the risk of reversion to the mean. As you will observe one of the stocks in today's table ended above $10 on Tuesday and was downgraded to hold from buy.
Reading the TableOV/UN Valued: Stocks with a red number are undervalued by this percentage. Those with a black number are overvalued by that percentage according to ValuEngine. VE Rating: A "1-engine" rating is a strong sell, a "2-engine" rating is a sell, a "3-engine" rating is a hold, a "4-engine" rating is a buy and a "5-engine" rating is a strong buy. Last 12-Month Return (%): Stocks with a red number declined by that percentage over the last 12 months. Stocks with a black number increased by that percentage. Forecast 1-Year Return: Stocks with a red number are projected to decline by that percentage over the next 12 months. Stocks with a black number in the table are projected to move higher by that percentage over the next 12 months. Value Level: Price at which to enter a GTC limit order to buy on weakness. The letters mean; W-weekly, M-monthly, Q-quarterly, S-semiannual and A-annual. Pivot: A level between a value level and risky level that should be a magnet during the time frame noted. Risky Level: Price at which to enter a GTC limit order to sell on strength. Casual apparel retailer Aeropostale (ARO) ($10.17) had been above $10 a share until Aug. 22 when they missed EPS estimates by 10 cents reporting a loss of 34 cents a share. The stock traded as low as $7.78 on Sep. 4. On Tuesday private equity firm Sycamore Partners purchased an 8% stake in the retailer and the stock quickly moved back above $10 to a day's high at $10.47. This puts the stock within the price gap between the Aug. 22 low of $10.88 and the Aug. 23 high at $9.55. This morning the stock has been downgraded to hold from buy. My weekly value level is $7.61 with a quarterly risky level at $12.11.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV