NEW YORK (TheStreet) -- The discount retailers are in the retail-wholesale sector, which is one of the five of 16 sectors that I gave an overweight rating on Tuesday in Cisco Joins List of 11 Buy-Rated Dow Stocks as Fundamentals Deteriorate. On June 3 I wrote, Discount Retailers Track Slow Consumer Spending where I profiled nine buy-rated discount retailers. Today these nine stocks remain buy-rated and seven have traded higher since the end of May.The headliner this week just as it was three months ago is Dollar General ( DG) which reported quarterly earnings pre-market on Wednesday. This discounter beat EPS estimates by 3 cents earning 77 cents a share. The stock traded to a new multi-year high at $57.42 despite a cautious outlook. Fundamentally, the stock market remains under a ValuEngine valuation warning with 74.6% of all stocks overvalued, and with 38.0% overvalued by 20% or more. We show 15 of 16 sectors overvalued, 13 by double-digit percentages, with four overvalued by more than 20%. The retail-wholesale sector is overvalued by 19.3%. Seven of the nine discount retailers rose by 1.7% to 14.9% since the end of May with two declining by 2.6% and 8.6%. Eight of nine are overvalued but by 18.8% or less. At the end of May all nine stocks were above their 200-day SMAs and today two are below on the risk of a reversion to the mean.
Big Lots ( BIG) ($34.79) beat EPS estimates by 6 cents earning 31 cents on Aug. 30 and traded to a reaction high at $35.81 on Sept. 3. The 200-day and 50-day SMAs are $33.43 and $34.63 with my quarterly risky level at $36.35. Costco ( COST) ($111.50) fell below its 50-day SMA at $114.53 on Aug. 15 with the 200-day SMA at $106.96. My semiannual value level is $103.24 with a quarterly pivot at $113.74 and monthly risky level at $118.94. Dollar General ($56.39) held its 50-day SMA at $53.78 on Tuesday then traded as high as $57.42 on the better than expected EPS. The 200-day SMA is $49.84 with a semiannual pivot at $56.97 and monthly risky level at $58.37. Dollar Tree ( DLTR) ($54.17) missed EPS estimates by a penny earning 56 cents a share on Aug. 22. The stock traded to a reaction high at $54.92 then faded to its 50-day SMA at $52.88. My annual value level is $25.32 with a semiannual pivot at $52.56 and monthly risky level at $57.02. FDO) ($70.29) beat EPS estimates by 2 cents earning $1.05 back on July 10. The stock set a multi-year high at $74.44 on Aug. 14 then faded to its 50-day SMA at $68.64. My monthly value level is $63.09 with a quarterly pivot at $70.03 and semiannual risky level at $73.03. ROST) ($69.09) beat EPS estimates by 5 cents earning 98 cents a share on Aug. 22. The stock set a reaction high at $70.86 on Aug. 23. My annual value level is $54.55 with a weekly pivot at $68.56 and monthly risky level at $73.81.
Target ( TGT) ($63.55) beat EPS estimates by 22 cents earning $1.19 on Aug. 21 and the stock traded lower to $63.05 on Aug. 29. Target has been below its 200-day SMA at $66.56 since Aug. 21. My annual value level is $53.54 with an annual pivot at $65.45 and semiannual risky level at $72.47. TJX ( TJX) ($53.87) beat EPS estimates by 3 cents earning 66 cents on Aug. 20. The stock set a reaction high at $54.66 on Aug. 26. My semiannual value level is $49.79 with an annual pivot at $52.67 and monthly risky level at $56.18. WMT) ($72.91) missed EPS estimates by a penny earning $1.24 on Aug. 15. The stock has been below its 200-day SMA at $73.86 since Aug. 23. My semiannual value level is $61.55 with a semiannual risky level at $74.96. At the time of publication the author held no positions in any of the stocks mentioned. Follow @Suttmeier This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.