KB Home, Lennar, AutoZone, CarMax Headline Earnings Preview

NEW YORK (TheStreet) -- A dozen companies of interest will report earnings this week. Today I provide my 'buy and trade' parameters for six that report on Tuesday or Wednesday. Three are buy-rated stocks in the retail-wholesale sector, one is a buy-rated stock in the computer and technology sector and two are sell and strong-sell rated homebuilders in the construction sector.

I continue to give the retail-wholesale sector an overweight rating as 79.8% of all stocks are rated buy. Two of the three sell auto parts, which has been a hot industry lately.

The computer and technology sector has an overweight rating with 47.4% of all stocks in the sector rated buy. Today's company is an original equipment manufacturer located in Tampa Bay, Fla.

The construction sector has an underweight rating with 60.2% of all stocks rated sell or strong sell, which are the ratings of the two homebuilders profiled today.

On Friday the stock market gave up some of the strong gains achieved following the release of the Fed statement last Wednesday afternoon. The Nasdaq has been the mojo leader and ended last week above monthly, semiannual and weekly pivots at 3772, 3759 and 3749 and set a new multi-year high at 3798.76 on Friday.

The new all-time highs are 15,709.59 Dow Industrials set on Wednesday, 1729.86 S&P 500 on Thursday, 6754.81 Dow transports on Friday and 1080.49 Russell 2000 on Wednesday.

If the Nasdaq stays above its three pivots the upside potential elsewhere is to semiannual risky levels at 16,490 Dow Industrials, 1743.5 S&P 500, 7104 Dow transports and 1089.42 Russell 2000.

This week's value levels are 14,927 Dow Industrials, 1667.5 S&P 500, 3749 Nasdaq, 6530 Dow transports and 1042.79 Russell 2000.

Quarterly and annual value levels remain at 14,288 / 12,696 Dow Industrials, 1525.6 / 1348.3 S&P 500, 3284 / 2806 Nasdaq, 5348 / 5469 Dow transports, and 863.05 / 809.54 Russell 2000.

One of the six stocks previewed in this post is undervalued but only one is overvalued by more than 20%, One stock is down 4% over the last 12 months, while four gained between 13.0% and 70.9%. Four of the six are trading above their 200-day simple moving averages, which reflects the risk of reversion to the mean.

Reading the Table

OV/UN Valued: 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 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.

Value Level: 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: Price at which to enter a GTC limit order to sell on strength.

AutoZone ( AZO) ($420.00) set a multi-year high at $452.18 on July 31 then traded as low as $409.36 on Tuesday. The stock is between its 200-day SMA at $399.04 and its 50-day SMA at $428.37. My weekly value level is $405.93 with a semiannual pivot at $425.00 and quarterly risky level at $449.90.

Bed Bath & Beyond ( BBBY) ($75.47) set a multi-year high at $78.25 on Aug 6. My weekly value level is $73.93 with a semiannual pivot at $76.93 and semiannual risky level $80.54.

Jabil Circuit ( JBL) ($23.11) set a 2013 high at $24.32 on Sept. 10 then ended last within a penny of its 50-day SMA at $23.12. My monthly value level is $21.37 with a weekly pivot at $23.95 and semiannual risky level at $28.37.

KB Home ( KBH) ($17.63) set a 2013 low at $15.57 on Aug. 15 then traded as high as $18.98 on Thursday vs. the 200-day SMA at $19.11. My weekly value level is $16.52 with a quarterly pivot at $17.43 and monthly risky level at $22.79.

CarMax ( KMX) ($51.19) set a multi-year high at $52.27 on Sept. 10. My semiannual value level is $50.77 with a weekly pivot at $51.67 with a monthly risky level at $51.94.

Lennar ( LEN) ($35.15) set a 2013 low at $30.90 on Aug. 15 then traded as high as $37.84 on Sep. 19 vs. the 200-day SMA at $38.24. My weekly value level is $33.76 with a monthly pivot at $35.93 and semiannual risky level at $40.29.

At the time of publication the author held no positions in any of the stocks mentioned.

This article is commentary 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.

More from Opinion

Apple Needs to Figure Out Its Self-Driving Vehicle Strategy

Apple Needs to Figure Out Its Self-Driving Vehicle Strategy

Throwback Thursday: Tesla, Chip Stocks, TheStreet's Picks

Throwback Thursday: Tesla, Chip Stocks, TheStreet's Picks

12 Stocks That Our Writers and Their Sources Recommend You Buy Here

12 Stocks That Our Writers and Their Sources Recommend You Buy Here

Musk Goes on Unoriginal Media Tirade

Musk Goes on Unoriginal Media Tirade

What's Happening in Video Games This Week: On the Road to E3

What's Happening in Video Games This Week: On the Road to E3