NEW YORK ( TheStreet) -- The nine stocks I am profiling today have sell ratings according to www.ValuEngine.com and have recently set all-time highs or multi-year highs and are overvalued. Two are components of the Dow Industrial Average.
It is a prudent investment policy to book profits or at least to pare back positions in sell-rated stocks to your initial dollar investment in a stock market where 77.6% of all stocks are overvalued, 44.5% by 20% or more.
For example, if you invested $5,000 in a stock and today that investment is worth $10,000 you have doubled your money. Selling half the position locks in a significant profit and you keep your initial $5,000 investment.
One stock is in the aerospace sector. This sector is 25.5% overvalued and rated underweight.
Two stocks are in the autos-tires-trucks sector. This sector is 32.1 overvalued and rated underweight.
Four stocks are in the basic materials sector. This sector is 1.2% undervalued and rated underweight.
One is in the computer and technology sector. This sector is 26.5% overvalued and rated overweight.
One is in the transportation sector. This sector is 26.4% overvalued and rated 'avoid-source-of-funds'.
All nine stocks profiled in this post are overvalued with seven overvalued by 25% or more. All nine have gained by double-digit percentages over the last 12 months, seven by 22.7% to 172.6%. All are trading above their 200-day simple moving average, which reflects the risk of reversion to the mean.
Reading the Table
Stocks with a red number are undervalued by this percentage. Those with a black number are overvalued by that percentage according to ValuEngine.
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.