Analysis of the Retail Stocks in the S&P Retail Index

The overvalued/undervalued data show that 17 of the stocks in RLX are undervalued, with Office Depot ( ODP) undervalued by 73.1%, Best Buy ( BBY) undervalued by 52.4% and Staples ( SPLS) undervalued by 49.1%.

Best Buy, Sherwin Williams ( SHW) and Wal-Mart Stores ( WMT) have "5-Engine" Strong Buy ratings, according to ValuEngine.

At the other end of the spectrum, Office Depot, J.C. Penney ( JCP) and RadioShack ( RSH) have "2-Engine" Sell ratings, and Sprint Nextel ( S) has a "1-Engine" Strong Sell rating.

Nine of the 28 stocks traded lower over the past 12 months. RadioShack was the biggest loser with a loss of 77.6%. The biggest winners over the past 12 months were Gap ( GPS), up 119.2%, and Sherwin Williams, up 96.0%.

Only four of the 28 stocks are projected to decline over the next 12 months. The best projected gains are the Strong Buy-rated Best Buy, Sherwin Williams and Wal-Mart Stores.

Price-to-earnings ratios are relatively high for the stocks that have performed well.

Costco ( COST) ($96.25) traded to an all-time high at $97.76 on July 27. My annual value level is $89.71 with a monthly pivot at $93.45 and a quarterly risky level at $109.06.

Dillards ( DDS) ($74.47) traded to an all-time high at $76.33 on Aug. 9. My monthly value level is $72.83, and my quarterly risky level is $74.63

Dollar General ( DG) ($49.66) traded to an all-time high at $56.04 on July 10. I do not show a nearby value level, and my quarterly, semiannual and monthly risky levels are at $52.24, $53.23 and $53.83, respectively.

Family Dollar ( FDO) ($62.35) traded to an all-time high at $74.73 on June 14. My annual value level is $36.02, while my semiannual pivot is at $62.16 and my monthly risky level is at $66.06.

Gap ($35.12) traded to a multiyear high of $36.23 on Aug. 17, a level not seen since August 2002. My monthly value level is $32.06 with a weekly risky level at $36.82.

Home Depot ( HD) ($56.96) traded to a multiyear high at $57.17 on Aug. 17, a level not seen since August 2002. My quarterly value level is $54.42, and my monthly risky level is at $59.18.

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