NEW YORK (TheStreet) -- Six of the 13 companies we profiled here last week were sent to the earnings woodshed following disappointing results or weaker than expected outlooks. Yoga pants maker Lululemon (LULU) was the biggest loser down 15.8% since Monday followed by network specialty company Ciena (CIEN) which lost 6.3% since Monday.
Since ValuEngine shows that 82.3% of all stocks are overvalued with 48.9% overvalued by 20% or more, it's not surprising that the earnings woodshed has become more crowded as companies miss earnings estimates or offer cautious forward guidance.
Among the stocks in today's post, three have buy ratings and three have hold ratings. Three stocks are undervalued by 2.9%, 9.8% and 13.5% while the other three are overvalued by 16.4%, 34.3% and 43.6%. Three have losses of 5%, 11.4% and 20.8% over the last 12 months while three have gains of 27.6%, 37.2% and 50.1% over the last 12 months. Three ended last week above their 200-day simple moving averages and three are below.
To employ a 'buy and trade' strategy use a GTC limit order to buy on weakness to a value level. Once you are long a stock, or are currently long you should consider reducing a long position using a GTC limit order to sell strength to a risky level.
Ciena ($21.67 vs. $23.12 on Dec. 9 down 6.3%) missed EPS estimates by 9 cents earning 8 cents a share premarket on Dec. 12. The stock traded as high as $24.00 on Dec. 6 and stayed below its 50-day SMA now at $23.90 and traded to a post-earnings low of $20.93 on Thursday staying above its 200-day SMA at $20.45. The hold rated network specialist company is 16.4% overvalued and is up 16.4% over the last 12 months. My weekly value level is $18.31 with semiannual and annual pivots at $23.72, $22.09 and $23.33 and quarterly and monthly risky levels at $24.22 and $25.28.
H & R Block (HRB) ($28.04 vs. $29.01 on Dec. 6 down 3.3%) reported a loss of 42 cents a share which was 5 cents worse than expected in the afterhours on Dec. 10. The stock has been trading back and forth around its 200-day SMA since Sept. 23 and on Thursday traded between $27.19 and $29.70 ending the week below its 200-day at $28.57. The preparer of tax returns still has a hold rating and is 43.6% overvalued and is up 50.11% over the last 12 months. My monthly value level at $27.24 was tested at the post-earnings low and my weekly pivot at $29.51 was tested at the post-earnings high. My semiannual value level is $21.13 with monthly and weekly pivots at $27.24 and $27.51 and my quarterly risky level at $30.06.
Joy Global (JOY) ($53.53 vs. $55.98 on Dec. 6 down 4.4%) matched estimates earning $1.11 a share premarket on Dec. 11. The stock closed at $56.85 on Tuesday and broke below its 200-day SMA at $54.24 on Wednesday trading to a post-earnings low at $52.39 on Thursday. The hold rated provider of surface and underground mining equipment is 2.9% undervalued and has declined in price by 11.4% over the last 12 months. My monthly value level is $46.85 with a weekly risky level at $57.77.
Lululemon ($59.20 vs. $70.34 on Dec. 9 down 15.8%) beat estimates by 4 cents earning 45 cents a share premarket on Thursday. Cautious guidance caused the stock to decline from its Wednesday close at $68.35 to a low of $58.54 on Friday. The yoga pants maker has a buy rating and has become 13.5% undervalued and is now down 20.8% over the last 12 months. My weekly pivot is $61.43 with the 200-day SMA at $70.55 and a monthly risky level at $80.21.
Pep Boys (PBY) ($12.85 vs. $13.44 on Dec. 6 down 4.4%) missed estimates by 8 cents earning 5 cents a share in the afterhours on Dec. 9. After trading as high as $14.07 on Nov. 19, the stock closed at $13.41 on Dec. 9 then plunged to a post-earnings low at $11.60 on Tuesday before rebounding back above its 200 day SMA at $12.18 ending the week at $12.85. Manny, Moe & Jack has a buy rating, is 34.3% overvalued and has gained 27.6% over the last 12 months. My semiannual value level is $11.10 with quarterly and weekly pivots at $13.27 and $13.47 and a semiannual risky level at $16.79.
Vera Bradley (VRA) ($22.47 vs. $23.44 on Dec. 9 down 4.1%) beat estimates by 3 cents earning 37 cents a share in the afterhours on Wednesday. The stock opened below its 200-day SMA at $22.26 on Thursday setting a day's low at $21.85 then traded up to a day's high at $24.82 before declining back to its 200-day on Friday. The buy rated provider of women's accessories is 9.8% undervalued with a loss of 5% over the last 12 months. My monthly value level at $21.88 held at the low. My annual value level is $19.48 with a monthly pivot at $21.88 and annual and weekly risky levels at $24.86 and $26.73.
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.