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.
Analysis of the Consumer Discretionary Sector
The overvalued and undervalued data for the top 17 components of the XLY shows that 11 are undervalued, with Ford Motor ( F) undervalued by 28.4% and Amazon.com ( AMZN) overvalued by 39.2%. Home Depot ( HD) and News Corp. ( NWS) are the only two stocks in the table with a "5-Engine" strong buy rating, according to ValuEngine. There are two "3-Engine" hold rated stocks: Ford Motor and Nike ( NKE). The remainders are "4-Engine" hold rated. Ford is the only stock of the 17 to trade lower over the past 12 months, with a loss of 13.8%. Home Depot was the biggest winner with a gain of 77.5%. Only Ford is expected to move sideways over the next 12 months. The stocks with the best-projected gains are the strong-buy rated Home Depot and News Corp. P/E ratios are elevated for 11 of the 17, with a reading above 16 times forward 12-month earnings expectations. Comcast ( CMCSA) ($34.55) traded to a new multi-year high at $35.60 on Aug. 7. My quarterly value level is $33.45 with a weekly pivot at $34.37 and a monthly risky level at $36.45. Investors should consider booking profits on this stock. McDonalds ( MCD) ($87.90) traded to a new all-time high of $102.22 on Jan. 20. My semiannual value level is $86.46 with a weekly pivot at $88.52 and a monthly risky level at $93.55. Disney ( DIS) ($49.86) traded to a new all-time high of $50.65 on Aug. 8. My semiannual value level is $48.76 with a weekly pivot at $50.64 and a monthly risky level at $52.54. Investors should consider booking profits on this stock.