At www.ValuEngine.com we show that the Basic Materials sector is 5.0% overvalued, with the Steel Producer industry 10.7% undervalued and the Paper & Paper Products industry 22.3% overvalued. All seven of the stocks in today’s table have complete ValuEngine data and have enough price data to have most value levels, risky levels and pivots.
AKS – was a $73 stock in May 2008, and has only been below $10 since February 1, 2012.
BZ – has been below $10 for at least five years and traded at a nickel in November 2008.
GGB – has only been below $10 since September 26, 2012.
MASC – was a 50 cent stock in April 2009 and has just moved above $10 this week.
MERC – traded at a quarter a share in March 2009 then as high as $15.25 in April 2011 and has been below $10 since the week of July 29, 2011.
SID – has only been below $10 since March 28, 2012.
WPP – has been below $10 since the week of May 7, 2010.
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. The most undervalued stock in today’s table is AKS by 17.9%. The most overvalued stock is SID by 103.8%.
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 four Hold rated stocks; two Sell rated stocks and one Strong Sell rated stock.
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 BZ with a gain of 31.4%. The biggest loser is AKS with a loss of 44.4%.
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. Only two stocks are projected to be higher over the next twelve months, but by meager gains of 1.5% BZ and 3.3% GGB. The two projected biggest losers are MERC with a loss of 10.0% and SID with a loss of 12.2%.
P/E Ratios – Of the five stocks with P/E ratios two have reasonable P/E’s and two have elevated P/E’s, 27.6 on SID and 30.6 WPP.
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.