ValuEngine Weekly: Tech Stocks, Valuations, and More

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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