NEW YORK (TheStreet) -- Semiconductors have been a leadership industry within the computer and technology sector. The PHLX Semiconductor Sector IndexI:SOX is up 28.8% year to date setting a new multi-year high at 500.25 last Thursday. The computer and technology sector is 25.5% overvalued with the semiconductor industry 23.7% overvalued.
Today's table shows the 26 of the 30 components of the semiconductor index that trade above $10 a share. The reason I separated them from the four trading below $10 a share it that many equity money managers cannot buy stocks that are trading below $10 a share.
Of the 26 only two are undervalued;
by 21.5% and
by 10.4%. 15 components are overvalued by more than 20%.
Five stocks are rated buy according to ValuEngine with one rated sell and thus 20 are rated hold. The sell rated stock in the SOX is
who report quarterly results on Thursday.
Performance over the last 12 months shows that only one declined (Broadcom) and that 16 gained more than 20% over the last 12 months.
The projected performances over the next 12 months range from a loss of 7.4% to a gain of 6.1%.
The 12 month trailing price-to-earnings ratios are elevated with 19 stocks having a P/E above 15.0.
Only three stocks are trading below their 200-day simple moving averages which indicate the risk of reversion to the mean for the other 23.
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.
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.
A level between a value level and risky level that should be a magnet during the time frame noted.
Price at which to enter a GTC limit order to sell on strength.
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Here are my buy-and-trade strategies for the five stocks with buy ratings:
($47.74) set a multi-year high at $50.00 on Aug. 1 then declined to $45.75 on Aug. 28 and is below its 50-day SMA at $48.13. My quarterly value level is $41.51 with a weekly pivot at $47.39 and monthly risky level at $49.56.
($12.00) set a 2013 high at $13.51 on Aug.14 and is now below its 50-day SMA at $12.48. My quarterly value level is $8.74 with an annual pivot at $12.38 and weekly risky level at $13.16.
($60.10) set a multi-year high at $63.97 on July 22 then traded as low as $53.09 on July 30, and is now above its 50-day SMA at $58.21. My quarterly value level is $56.22 with a weekly pivot at $59.10 and monthly risky level at $66.14.
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($16.55) set a multi-year high at $18.73 on July 11 and then traded as low as $15.22 on Aug. 30, and is now between its 50-day and 200-day SMAs at $16.36 and $16.66. My quarterly value level is $15.88 with a monthly pivot at $16.60 and semiannual risky level at $21.82.
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($46.72) set a multi-year high at $48.12 on Sept. 17 and is above its 50-day SMA at $45.64. My monthly value level is $44.95 with a weekly pivot at $45.30 and no risky level. The ValuEngine one-year price target is $48.77.
At the time of publication the author held no positions in any of the stocks mentioned.
This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.
Richard Suttmeier has an engineering degree from Georgia Tech and a master of science from Brooklyn Poly. He began his career in the financial services industry in 1972 trading U.S. Treasury securities in the primary dealer community. In 1981 he formed the Government Bond Department at LF Rothschild and helped establish that firm as a primary dealer in 1986. Richard began writing market research in 1984 and held positions as market strategist at firms such as Smith Barney, William R Hough, Joseph Stevens, and Rightside Advisors. He joined
in 2008 producing newsletters covering the U.S. capital markets, and a universe of more than 7,000 stocks. Richard employs
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