Walgreen, CarMax and Nike Earnings Preview

NEW YORK (TheStreet) -- Today's buy-and-trade earnings previews focus on nine companies in five sectors that report quarterly results on Thursday and Friday. Among these stocks are buy rated retail pharmacy chain Walgreen (WAG), the buy rated used cars seller CarMax (KMX) and hold rated new Dow component and athletic footwear and apparel maker Nike (NKE)

The nine stocks include four from the retail-wholesale sector, two from the construction sector, and one each from the computer and technology, consumer discretionary and consumer staples sectors.

The computer and technology sector is 27.8% overvalued with an overweight rating. Of the 1136 stocks 52.3% in this sector have buy or strong buy ratings.

The construction sector is 17.2% overvalued with an underweight rating. Of the 156 stocks 56.4% in this sector have sell or strong sell ratings.

The consumer discretionary sector is 27.6% overvalued with an equal-weight rating. Of the 392 stocks 83.7% in this sector have hold ratings.

The consumer staples sector is 22.6% overvalued with an overweight rating. Of the 255 stocks 48.6% in this sector buy or strong buy ratings.

The retail-wholesale sector is 23.8% overvalued with an overweight rating. Of the 343 stocks 84.5% in this sector have buy or strong buy ratings.

Six of the nine stocks profiled today have buy ratings, two have hold ratings and one has a sell rating. Two stocks are fractionally undervalued by 2.1% and 2.3% and five are overvalued by 21.3% to 62.4%. All nine stocks have gains over the last 12 months, one by 120.8% and another by 441%. Two are below their 200-day simple moving averages while seven are above their 200-day simple SMAs which reflect the risk of reversion to the mean.

Conagra Foods (CAG) ($31.48) set a second half 2013 low at $29.87 on Sept. 30 then as high as $33.47 on Dec. 9 staying below its 200-day SMA at $33.98. Analysts expect the company to report earnings of 55 cents a share in the premarket on Thursday. The buy rated food company is 2.3% undervalued with a gain of 3.8% over the last 12 months. My monthly value level is $31.33 with weekly, semiannual and quarterly risky levels at $33.55, $34.74 and $35.14.

Darden Restaurants (DRI) ($52.33) set a recent high at $54.08 on Nov. 25 then a recent low at $50.69 on Dec. 12 staying above its 200-day SMA at $50.42. Analysts expect earnings of 21 cents a share in the premarket on Thursday. The buy rated operator of restaurants such as Red Lobster, Olive Garden, LongHorn Steakhouse and The Capital Grille is 34.4% overvalued with a gain of 11.6% over the last 12 months. My annual and monthly value levels are $50.52 and $49.13 with weekly and annual pivots at $52.77 and $53.36 and quarterly risky level at $55.68.

KB Home (KBH) ($17.02) has been below its 200-day SMA since July 24 with this average now at $19.11. The recent low has been $15.48 set on Nov. 11. Analysts expect this homebuilder to report earnings of 45 cents a share on Dec. 19. The stock is sell rated and 7.9% overvalued with a gain of 3.4% over the last 12 months. My monthly value level is $15.60 with a weekly pivot at $17.07 and annual risky level at $22.95.

CarMax ($51.75) set an all-time intra-day high at $52.63 on Dec. 9 and is above its 50-day and 200-day SMAs at $49.16 and $47.18. Analysts expect earnings of 48 cents a share premarket on Friday. The seller of used cars has a buy rating is 32.5% overvalued with a gain of 48.6% over the last 12 months. My semiannual value levels are $50.94 and $50.77 with a quarterly pivot at $52.09 and monthly risky level at $54.24.

Nike ($76.76) set an all-time intra-day high at $80.26 on Dec. 9 and has been trading around its 50-day SMA at $76.76 in recent days. Analysts expect earnings of 58 cents a share in the afterhours on Thursday. The hold rated maker of athletic shoes and apparel is 33.4% with a gain of 56.7% over the last 12 months. My quarterly value level is $71.62 with a monthly risky level at $79.07.

Rite Aid (RAD) ($5.68) set a multi-year high at $6.15 on Dec. 4 and is above its 50-day SMA at $5.36 and has been above its 200-day SMA since Jan. 8 with this level now at $3.55. Analysts expect this drug store chain to report earnings of 4 cents a share in the premarket on Thursday. The buy rated stock is 62.4% overvalued with a huge gain of 411% over the last 12 months. My weekly value level is $5.61 with a monthly risky level at $6.29.

Tibco Software (TIBX) ($23.96) set a recent high at $27.15 on Sept. 20 then tested its 200-day SMA at $22.92 with a low of $22.39 on last Thursday. Analysts expect earnings of 32 cents a share in the afterhours on Thursday. The buy rated provider of software solutions is 2.1% undervalued with a gain of 16.9% over the last 12 months. My weekly value level is $22.49 with a monthly risky level at $26.04.

Walgreen ($56.25) set an all-time intra-day high at $60.93 on Nov. 25 then traded below its 50-day SMA at $58.50 to a recent low at $55.92 on Dec. 5, still well above its 200-day SMA at $51.42. Analysts expect this drug store giant to report earnings of 72 cents a share in the premarket on Friday. The buy rated stock is 12.6% overvalued with a gain of 51.5% over the last 12 months. My quarterly value level is $49.12 with a monthly pivot at $57.04 and weekly risky level at $59.21.

Winnebago (WGO) ($31.64) set a multi-year intra-day high at $32.41 on Dec. 9 and is above its 50-day SMA at $29.55 with the 200-day SMA at $23.71. Analysts expect earnings of 39 cents a share in the premarket on Thursday. The hold rated builder of motor homes is 21.8% overvalued with a huge gain of 120.8% over the last 12 months. Weekly and monthly risky levels are $42.02 and $44.53.

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

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This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.

Richard Suttmeier is the chief market strategist at ValuEngine.com. He has been a professional in the U.S. Capital Markets since 1972, transferring his engineering skills to the trading and investment world.

Suttmeier has an engineering degree from Georgia Tech and a Master of Science degree from Brooklyn Poly. He began his career in the financial services industry in 1972 trading U.S. Treasury securities in the primary dealer community. He became the first long bond trader for Bache in 1978, and formed the Government Bond Department at LF Rothschild in 1981, helping establish that firm as a primary dealer in 1986. This experience gives him the insights to be an expert on monetary policy, which he features in his newsletters, and market commentary.

Suttmeier's industry licenses include, Series 7 and Registered Principal (Series 24). He has been the Chief Market Strategist for ValuEngine.com since 2008 and often appears on financial TV.

Click here for details on Suttmeier's "Buy and Trade" investment strategy.

Richard Suttmeier can be reached at RSuttmeier@Gmail.com

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