Goodyear and Tesla Lead Overvalued Auto-Related Stocks

NEW YORK (TheStreet) -- The yield on the U.S. Treasury bond approached 4% this week, which caused stocks to become more overvalued of less undervalued.

Friday, the ValuEngine valuation warning continues with 75.5% of all stocks overvalued 40% by 20% or more; 15 of 16 sectors are overvalued 13 by double-digit percentages. Six sectors are overvalued by more than 20% with the autos-tires-trucks the most overvalued by 26.4%.

The auto-tires-trucks sector is rated underweight with only one buy-rated stock and with 36.6% of all stocks rated sell.

The 14 stocks for this sector that I profile today have gained between 33.3% and 508.2% over the last 12 months, with four setting new multi-year or all-time highs this week. Eight of these stocks are rated hold and six are rated sell; 13 are overvalued by more than 20%, by 22.3% to 51.4%. All are above their 200-day simple moving average, which reflects the risk of a reversion to the mean.

Reading the Table

OV / UN Valued -- The stocks with a red number are undervalued by this percentage. Those with a black number are overvalued by that percentage according to ValuEngine.

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 twelve 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 twelve months. Stocks with a Black number in the Table are projected to move higher by that percentage over the next twelve months.

Value Level: is the 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.

Pivot: A level between a value level and risky level that should be a magnet during the time frame noted.

Risky Level: is the price at which to enter a GTC Limit Order to sell on strength.

Borg Warner ( BWA) ($98.70) reported quarterly results back on July 25 and beat EPS estimates by 9 cents earning $1.50 a share. The provider of vehicle power-train applications traded to a multi-year high at $100.54 on Aug. 13 then set the low end of a trading range at $94.29 on Aug. 28. My monthly value level is $97.25 with a semiannual pivot at $98.51 and weekly risky level at $103.48.

Cummins ( CMI) ($126.54) reported quarterly results on July 30 and beat EPS estimates by 23 cents earning $2.20 a share. The manufacturer of diesel engines traded to a 52-week high at $128.30 on Aug. 14 then set the low end of a trading range at $121.66 on Aug. 28. The stock almost re-tested its high on Thursday. My quarterly value level is $100.94 with a monthly pivot at $124.67 and weekly risky level at $132.11.

Delphi Auto ( DLPH) ($57.07) reported quarterly results on July 31 and beat EPS estimates by 11 cents earning $1.24 a share. The maker and provider of electrical power-train, safety and thermal technology solutions for the vehicle markets has a sell rating and traded to new multi-year high at $58.26 on Thursday testing this week's pivot at $58.15. My monthly risky level is $58.28.

Ford Motor ( F) ($17.05) missed quarterly results on July 23 earning 67 cents a share. The auto maker has a sell rating and traded to new multi-year high at $17.67 on July 24 then traded as low as $15.71 on Aug. 28. The stock has rebounded nearing the high and testing this week's pivot at $17.35 on Thursday. My monthly risky level is $17.70.

Federal Mogul ( FDML) ($16.46) reported quarterly results on July 24 and beat EPS estimates by 16 cents earning 55 cents a share. The supplier of power-train, chassis and safety technologies has a sell rating after a huge move to the upside from $4.80 a share on April 23 to $17.60 on August 9 then setting a low end of a trading range at $15.09 on August 28. My monthly value level is $13.53 with a semiannual risky level is $18.99.

General Motors ( GM) ($36.33) reported quarterly results on July 25 and beat EPS estimates by 8 cents earning 84 cents a share. The bailed-out auto maker traded to a multi-year high at $37.71 on July 25 then set the low end of a trading range at $33.50 on August 28 and this week has been attempting to recapture the high. My semiannual value level is $34.41 with a monthly pivot at $34.53 and weekly risky level at $36.50, which was tested on Thursday.

Goodyear Tire ( GT) ($20.77) reported quarterly results on July 30 and beat EPS estimates by 28 cents earning 76 cents a share. One of the world's largest tire manufacturers traded to a new multi-year high at $21.01 on Thursday. My monthly value level is $17.53 with a semiannual pivot at $20.48 and semiannual risky level at $23.51.

Harley-Davidson ( HOG) ($62.28) reported quarterly results on July 25 and beat EPS estimates by 4 cents earning $1.21 cents a share. The motorcycle maker set a multi-year high at $62.74 on Wednesday. My quarterly value level is $55.84 with a monthly pivot at $62.08 and semiannual risky level at $65.15.

Johnson Controls ( JCI) ($41.37) reported quarterly results on July 18 and beat EPS estimates by 3 cents earning 78 cents a share. The provider of seating and interior systems and batteries $42.01 on Aug. 14 then stayed well above its 50-day SMA at $39.51. My monthly pivot is $42.01 with a semiannual risky level at $43.88.

Lear ( LEA) ($70.78) reported quarterly results on July 26 and beat EPS estimates by 27 cents earning $1.62 cents a share. The maker of automotive seating systems and other electronics traded to a multi-year high at $73.32 on August 13 then traded as low as $68.26 on August 30. The 50-day SMA is $67.43 with my monthly risky level at $73.67.

Oshkosh ( OSK) ($46.52) reported quarterly results on July 30 and beat EPS estimates by 58 cents earning $1.67 cents a share. The sell-rated maker of military vehicles and other vehicles bodies traded to a multi-year high at $47.33 on Aug. 2 then drifted to $44.33 on Tuesday. The 50-day SMA is $42.96 with a semiannual pivot at $47.75 with a semiannual risky level at $48.19.

TRW Automobile ( TRW) ($70.71) reported quarterly results on July 30 and beat EPS estimates by 32 cents earning $2.02 cents a share. The supplier of integrated vehicle control and driver assist systems traded to a multi-year high at $74 on Aug. 1, then drifted to $68.75 on Aug. 28. The 50-day SMA at $69.66 has been holding on recent day's lows with a weekly pivot at $71.81 and monthly risky level at $73.64.

Tesla Motors ( TSLA) ($169.93) reported quarterly results on Aug, 7 and beat EPS estimates by 10 cents reporting a loss of 26 cents a share. The sell-rated maker of luxury electric-powered vehicles is clearly a mojo stock as a parabolic bubble inflated to an all time high at $173.73 on Sept. 3. My monthly value level is $153.16 with a weekly pivot at $171.42 and no risky levels at this time.

Visteon ( VC) ($73.30) reported quarterly results on Aug, 9 and beat EPS estimates by 36 cents earning $1.41 cents a share. The sell rated maker of electronic interior and lighting products traded to a multi-year high at $73.91 on Aug. 13, then drifted to $69.49 on August 28 and challenged the high in Thursday's trading. My semiannual value level is $68.18 with a weekly pivot at $72.12 and no risky levels.

At the time of publication the author had no position in any of the stocks mentioned.

This article was written 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 www.ValuEngine.com in 2008 producing newsletters covering the U.S. capital markets, and a universe of more than 7,000 stocks. Richard employs a "buy and trade" investment strategy and can be reached at RSuttmeier@Gmail.com.

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