Stocks Under $10: Specialty Retailers are Overvalued

Richard Suttmeier |

Stocks Under $10: Specialty Retailers are OvervaluedAt www.ValuEngine.com we show that the Retail-Wholesale sector is 10.9% overvalued with the Retail-Misc/Diversified industry 11.3% overvalued. All nine stocks in today’s table have complete ValuEngine data and enough data to have most value levels, risky levels and pivots.

Build-A-Bear Workshop Inc. (BBW) – has been below $10 since the week of May 16, 2008.
Big 5 Sporting Goods Corp. (BGFV) – has traded around $10 in 2012.
Hot Topic Inc. (HOTT) – has traded around $10 in 2012.
Kirkland's Inc. (KIRK) – has traded around $10 in 2012.
OfficeMax Incorporated (OMX) – has been below $10 since the week of May 13, 2011.
Pep Boys - Manny, Moe & Jack (PBY) – has traded around $10 in 2012.
SUPERVALU Inc. (SVU) – has been below $10 since the week of June 10, 2011.
TravelCenters of America LLC (TA) – has been below $10 since the week of February 25, 2011.
Tuesday Morning Corporation (TUES) – has been below $10 since the week of October 5, 2007.

Stocks Under 10 Retail


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 most overvalued stock in this table is TUES by 111.2%. The most undervalued stock is BBW by 52.8%.



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 two Buy rated stocks (OMX & TA) and seven hold rated stocks in the table.

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. The best performer over the past twelve months is TUES with a gain of 75.6%. The worst performer is SVU with a loss of 62.8%.

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. TA is projected to gain 11.0% over the next twelve months.

P/E Ratios – SVU & TA have extremely favorable P/E ratios with TUES & PBY showing extremely elevated P/E ratios.

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 should be 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.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

Companies

Symbol Name Price Change % Volume
NEE.P.H NextEra Energy Inc. Series H Junior Subordinated D 25.20 0.02 0.08 21,417 Trade
KIRK Kirkland\'s Inc. 9.18 0.20 2.23 357,278 Trade
TA TravelCenters of America LLC 3.60 0.00 0.00 115,031 Trade
BGFV Big 5 Sporting Goods Corporation 13.30 0.25 1.92 1,010,771 Trade
SVU SuperValu Inc. 2.94 -0.04 -1.34 5,724,071 Trade
BBW Build-A-Bear Workshop Inc. 10.25 -0.05 -0.49 94,285 Trade
PBY Pep Boys-Manny Moe & Jack n/a n/a n/a 0 Trade
TUES Tuesday Morning Corp. 1.75 -0.15 -7.89 6,785,713 Trade

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