At www.ValuEngine.com we show that the Finance sector is 12.9% overvalued, with the REIT Mortgage Trust industry 12.1% overvalued, Insurance Multi-line industry 1.4% overvalued, Banks-Midwest 2.3% overvalued, Banks West 1.7% undervalued and Banks Southeast 15.9% overvalued. All 10 stocks in today’s table have complete ValuEngine data and have enough price data to have most value levels, risky levels and pivots. At the beginning of the week all 10 of these stocks had Strong Buy ratings and today three have been downgraded to Buy.
Arbor Realty Trust Inc. (ABR) – has been below $10 since the week of October 10, 2008.
AEGON N.V. (AEG) – has also been below $10 since the week of October 10, 2008.
Baylake Corp. (BYLK) – has been below $10 since the week of March 7, 2008.
Eastern Virginia Bankshares Inc. (EVBS) – has been below $10 since the week of February 6, 2009.
First California Financial Group, Inc. (FCAL) – has been below $10 since the week of October 19, 2007.
First M&F Corporation (FMFC) – has been below $10 since the week of November 14, 2008.
Newcastle Investment Corp. (NCT) – has been below $10 since the week of June 6, 2008. NCT Is currently approaching $10 again after trading as low as 15 cents in November 2008.
Radian Group Inc. (RDN) – has been below $10 since the week of November 12, 2010.
Regions Financial Corp. (RF) – has been below $10 since the week of December 19, 2008.
United Community Banks, Inc. (UCBI) – was a $168 stock in March 2007, traded as low as $5.50 in November 2010 and is now approaching $10 again as 2013 begins.
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. There are no undervalued stocks in today’s table. The most overvalued stock is UCBI by 72.8%.
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. We have seven Strong Buy rated stocks, and three Buy rated stocks following three downgrades to Buy from 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 over the past twelve months! The biggest winner over the last twelve months is FMFC with a gain of 159.7%. There were no losers.
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. There is not a single stock expected to be lower over the next twelve months. The projected biggest gainers are FMFC and NCT with gains of 18.4% and 18.3%.
P/E Ratios – Of the nine stocks with P/E ratios all twelve month trailing P/E ratios between 9.6 and 21.2.
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 acts as a magnet during the time frame noted.
Risky Level: is the price at which to enter a GTC Limit Order to sell on strength.
Where to Buy and Where to Sell
A “Value Level” is a price at which buyers should add to positions on market price weakness. A “Risky Level” is a price at which sellers should reduce holdings on market price gains. A “Pivot” is a support or resistance (Value Level or Risky Level) that was violated in its time horizon, acting as a magnet during the remainder of that time horizon. These levels are calculated in weekly (W), monthly (M), quarterly (Q), semiannual (S) and annual (A) time horizons, based on the past nine closes in each time horizon. My theory is that the closes over a nine-year period are the summation of all bullish and bearish events for that market or specific stock. These levels are the most important element of my Buy and Trade Strategy.
Buy and Trade Guidelines
Investors should consider entering good until cancelled (GTC) orders to buy weakness to a value level, or to sell strength to a risky level.
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