Not all stocks beat their earnings estimates. Some that miss are taken to the woodshed with their share price chopped towards value levels. Today's woodshed stocks reflect small business and consumer concerns.
About 85% of the stocks in the S&P 500 are above their 200-day simple moving averages, which is a warning of a potential reversion to the mean.
Here are my buy and trade strategies for the woodshed stocks: BMC Software ( BMC) ($41.47) missed quarterly earnings and the stock dropped from $44.48 at the close on Jan. 28 to a low of $40.00 at the open on Jan. 29. The stock has a Hold rating and is on the cusp of its 200-day SMA at $41.50. My monthly value level is $40.60 with a semiannual pivot at $42.30 and weekly risky level at $42.97. Coach ( COH) ($51.55) missed quarterly earnings and the stock plunged from $60.68 on Jan. 22 to a low of $50.47 on Jan 23. The stock has a hold rating and gapped below its 200-day SMA at $59.61. My monthly value level lags at $41.13 with a weekly risky level at $54.42. Jos. A. Bank ( JOSB) ($40.25) reported in an 8-K filing after the close on Jan. 25 that net income for 2012 would be reported approximately 20% lower than in 2011. The stock ended last week at $46.27 and traded as low as $37.31 on Jan. 28. The stock has a buy rating and plunged below its 200-day SMA at $44.93. I do not have a value level with a weekly pivot at $41.51 and weekly risky level at $44.39. Lexmark International ( LXK) ($24.15) missed quarterly results in a big way and the stock gapped from $27.95 at Monday's close to a low of $23.28 on Jan. 30. The stock has a buy rating with the stock on the cusp of its 200-day SMA at $24.01. My semiannual value level is $21.83 with a weekly risky level at $26.99. NETGEAR ( NTGR) ($36.15) pre-announced Q4 sales during the day on Jan. 29 that were well below analysts' estimates. The stock closed Jan. 28 at $40.83 and traded as low as $35.90 on Jan. 29, which was a test of the 200-day SMA at $35.90. The stock has a hold rating with my monthly value level at $33.60 with a quarterly pivot at $38.62 and semiannual risky level at $41.75. PetSmart ( PETM) ($65.10) fell on a Wall Street downgrade that cited competition from Amazon.com. The stock ended last week at $69.99 and traded as low as $62.63 on Jan. 28. The stock has a buy rating and broke below its 200-day SMA at $66.69. My semiannual value level is $62.22 with a weekly pivot at $67.83 and quarterly risky level at $73.81.