This week, we provide top-five ranked VE data for our Technology Sector stocks. We also check our valuations in light of the recent market turmoil.
VALUATION WATCH: Overvalued stocks now make up 47.24% of our stocks assigned a valuation and 17.56% of those equities are calculated to be overvalued by 20% or more. Ten sectors are calculated to be overvalued.
ValuEngine Index Overview
| Index | Week Open | Friday AM | Change | % Change | YTD |
| DJIA | 23825.74 | 24103.11 | 277.37 | 1.16% | -2.49% |
| NASDAQ | 7125.2 | 7063.44 | -61.76 | -0.87% | 2.32% |
| RUSSELL 2000 | 1513.54 | 1529.43 | 15.89 | 1.05% | -0.40% |
| S&P 500 | 2619.35 | 2640.87 | 21.52 | 0.82% | -1.22% |
ValuEngine Market Overview
| Summary of VE Stock Universe | |
| Stocks Undervalued | 52.76% |
| Stocks Overvalued | 47.24% |
| Stocks Undervalued by 20% | 21.48% |
| Stocks Overvalued by 20% | 17.56% |
ValuEngine Sector Overview
| Sector | Change | MTD | YTD | Valuation | Last 12-MReturn | P/E Ratio |
| Aerospace | -0.59% | -1.77% | 0.25% | 16.77% overvalued | 21.79% | 22.61 |
| Computer and Technology | -1.16% | -1.69% | 1.19% | 13.42% overvalued | 23.02% | 31.18 |
| Multi-Sector Conglomerates | -0.34% | -3.27% | -3.90% | 4.92% overvalued | 8.54% | 24.48 |
| Consumer Staples | 0.47% | -0.78% | -3.03% | 3.81% overvalued | 11.79% | 24.65 |
| Medical | -0.23% | -0.67% | 1.44% | 2.56% overvalued | 33.13% | 28.67 |
| Consumer Discretionary | -0.34% | -2.00% | -2.73% | 2.29% overvalued | 14.61% | 26.33 |
| Industrial Products | -0.40% | -1.73% | -2.21% | 1.85% overvalued | 18.46% | 23.95 |
| Utilities | 0.29% | 1.34% | -5.28% | 1.43% overvalued | 2.19% | 22.04 |
| Business Services | -0.21% | -0.67% | 3.18% | 1.31% overvalued | 16.02% | 23.86 |
| Finance | 0.22% | 0.06% | -1.58% | 0.51% overvalued | 8.32% | 17.91 |
| Construction | -0.14% | -1.06% | -2.35% | 2.64% undervalued | 15.42% | 22.36 |
| Auto-Tires-Trucks | -0.11% | -4.81% | -7.48% | 3.18% undervalued | 13.31% | 13.43 |
| Transportation | -0.38% | -2.23% | -4.62% | 3.32% undervalued | 16.12% | 23.01 |
| Retail-Wholesale | 0.82% | -0.70% | -3.91% | 3.81% undervalued | 13.72% | 23.25 |
| Basic Materials | -0.72% | -2.20% | -1.76% | 8.65% undervalued | -1.02% | 22.88 |
| Oils-Energy | -1.16% | -3.04% | -6.42% | 16.61% undervalued | -3.06% | 25.41 |
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Valuations
We have a battle right now within our valuation calculations. The wild market action has us teetering between an undervalued and overvalued condition. So far, we have no clear trend. The recent volatility changes things almost daily. This week, we saw some real gyrations in tech thanks to the ongoing Facebook scandal and other issues–such as the attacks on Amazon.com emanating from within the White House.
It remains to be seen how this will all pan out. We would like to see some sort of return to “normalcy” within Washington so that we can avoid any sort of self-inflicted wounds vis-a-vis trade, the tech sector, etc. We should be basking in the strong economic numbers, the good jobs picture, the possibility of rising wages–finally!–the signed budget deal, and other good news.
Sector Talk–Technology
Below, we present the latest data on Technology stocks from our Professional Stock Analysis Service. Top- five lists are provided for each category. We applied some basic liquidity criteria–share price greater than $3 and average daily volume in excess of 100k shares.
Top-Five Technology Stocks–Short-Term Forecast Returns
| Ticker | Name | Mkt Price | Valuation (%) | Last 12-M Return (%) |
| AUO | AU OPTRONCS-ADR | 4.61 | 28.28% | N/A |
| TSEM | TOWER SEMICOND | 27.23 | 68.21% | 18.08% |
| CTL | CENTURYLINK INC | 16.13 | 108.35% | -28.66% |
| TSG | STARS GROUP INC | 26.05 | 10.12% | 54.60% |
| MU | MICRON TECH | 52.4 | -0.86% | 82.20% |
Top-Five Technology Stocks–Momentum
| Ticker | Name | Mkt Price | Valuation (%) | Last 12-M Return (%) |
| EGAN | EGAIN CORP | 7.95 | 3.61% | 412.87% |
| QNST | QUINSTREET INC | 13.87 | N/A | 267.90% |
| GRUB | GRUBHUB INC | 103.34 | 88.85% | 206.92% |
| BZUN | BAOZUN INC | 44.79 | N/A | 200.00% |
| SQ | SQUARE INC | 51.06 | N/A | 196.00% |
Top-Five Technology Stocks–Composite Score
| Ticker | Name | Mkt Price | Valuation (%) | Last 12-M Return (%) |
| MU | MICRON TECH | 52.4 | -0.86% | 82.20% |
| WDC | WESTERN DIGITAL | 92.18 | -10.64% | 17.32% |
| LRCX | LAM RESEARCH | 202.62 | -1.54% | 58.54% |
| AMAT | APPLD MATLS INC | 55.44 | -1.97% | 42.67% |
| HPQ | HP INC | 21.77 | 0.81% | 26.57% |
Top-Five Technology Stocks–Most Overvalued
| Ticker | Name | Mkt Price | Valuation (%) | Last 12-M Return (%) |
| DDD | 3D SYSTEMS CORP | 11.51 | 300.00% | -19.11% |
| TWOU | 2U INC | 84.85 | 181.30% | 126.93% |
| WIFI | BOINGO WIRELESS | 25.16 | 148.79% | 93.99% |
| GTT | GTT COMMUNICATN | 54.35 | 144.26% | 131.28% |
| CREE | CREE INC | 40.08 | 116.30% | 47.95% |
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