NEW YORK (TheStreet) - In my earlier story this morning I provided post-earnings 'buy and trade' strategy for six stocks that missed estimates and were sent to the earnings woodshed. In this story I focus on five stocks that traded higher post-earnings. Gun maker Smith & Wesson (SWHC) shot higher but consolidated well shy of its multi-year intra-day high at $13.38 set on Aug. 6. The biggest winner was Adobe (ADBE) which popped 9.8% last week on positive news on its cloud computing initiatives.
Last Monday, I wrote Manny, Moe & Jack, Toll Brothers Continue Earnings Season and I will cover the homebuilders again Thursday following the Wednesday release of housing starts. The key will be whether or not single family starts are trending above 600,000.
Among the five stocks in today's post, two have buy ratings and three have hold ratings. All five are overvalued with two overvalued by 55.5% and 99.6%. All have significant gains over the last 12 months between 29.7% and 103.4%. All five are above their 200-day SMAs indicating the risk of a reversion to the mean.
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.
Adobe Systems ($60.89 vs. $55.44 on Dec. 9 up 9.8%) missed estimates by a penny earning 18 cents a share Thursday afterhours. The stock initially traded lower afterhours, but when the company offered positive guidance on its cloud computing initiatives the stock gapped higher Friday to a new all-time intra-day high at $61.09. The hold rated software publisher is 99.6% overvalued and has gained 71.4% over the last 12 months and is well above its 200-day simple moving average at $47.85. My quarterly and monthly value levels are $55.39 and $55.66 with a weekly pivot at $60.97.
AutoZone (AZO) ($465.18 vs. $459.60 on Dec. 6 up 1.2%) beat estimates by 3 cents earning $6.29 a share in the premarket on Dec. 10. The stock gapped higher setting a new all-time intra-day high at $484.16 then consolidated that gain to a low of $463.49 on Dec. 12. The buy rated automotive supplies company is 8.9% overvalued and has gained 29.5% over the last 12 months and is well above its 200-day SMA at $422.07. My quarterly value level is $448.46 with a monthly pivot at $467.84 and semiannual and weekly pivots at $473.93 and $478.15, which was tested at the all-time.
Men's Wearhouse (MW) ($51.75 vs. $51.21 on Dec. 9 up 1.1%) beat estimates by 3 cents earning 90 cents a share in the afterhours on Wednesday. This company and its arch rival Joseph A. Bank (JOSB) are in a bidding war to buy each other with Men's Wearhouse the current bidder. This has both stocks in trading ranges. Men's Wearhouse traded between $50.89 and $52.66 on Thursday. The buy rated men's clothier is 55.5% overvalued and has gained 70.4% over the last 12 months. My weekly and monthly value levels are $49.41 and $47.41 without a risky level.
Smith & Wesson ($12.37 vs. $12.21 on Dec. 6 up 1.3%) beat estimates by 7 cents earning 28 cents in the afterhours on Tuesday. The stock gapped higher on Wednesday trading up to $12.98 then consolidated back down to $12.08 on Friday. The hold rated gun maker is 14.5% overvalued with a gain of 29.7% over the last 12 months. My weekly value level is $12.04 with a monthly pivot at $12.35 and quarterly risky level at $15.44.
Quicksilver (ZQK) ($8.28 vs. $8.01 on Dec. 9 up 3.4%) missed estimates by 8 cents reporting a loss of 4 cents a share in the afterhours on Thursday. Investors liked the retailer's restructuring plans and the stock popped to $8.68 on Friday closing above its 50-day and 200-day SMAs at $8.05 and $6.89. The hold rated provider of sport-related apparel and footwear is 5% overvalued with a gain of 103.4% over the last 12 months. My quarterly, semiannual and annual value levels are $6.75, $6.72 and $6.66 with a monthly pivot at $8.48 and weekly risky level at $9.48.
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.