{"id":3258,"date":"2024-02-23T19:12:23","date_gmt":"2024-02-23T19:12:23","guid":{"rendered":"http:\/\/blog.valuengine.com\/?p=3258"},"modified":"2024-02-23T19:12:23","modified_gmt":"2024-02-23T19:12:23","slug":"the-terrible-ten","status":"publish","type":"post","link":"http:\/\/blog.valuengine.com\/index.php\/the-terrible-ten\/","title":{"rendered":"The Terrible Ten"},"content":{"rendered":"

\u201cThe Magnificent Seven\u201d was the most popular sobriquet among stock market strategists, portfolio managers and reporters in 2023.\u00a0 Stocks such as Google, Nvidia, Tesla, Amazon, Microsoft, Meta, Apple dominated performance and volume charts.\u00a0 Almost unnoticed, Broadcom pushed its way to 4<\/span>th<\/span> in Market Cap in the Nasdaq and more than doubled in price last year but is still left out of the popular lists.\u00a0 Perhaps they should be called the \u201cElite Eight.\u201d\u00a0<\/span><\/p>\n

All 5,000 stocks, 16 sector groups, 140 industries, and 500 ETFs have been updated.<\/b><\/h6>\n
Two-week free trial:<\/b> www.ValuEngine.com<\/b><\/a><\/h6>\n

That said, most of the aforementioned group of quotable experts expect some mean reversion for the top stocks in the S&P 500 and counsel avoiding market cap weighting in favor of equal weighting.\u00a0 There has been an Invesco ETF based upon an equal-weighted version of the S&P 500 for more than 20 years with the ticker symbol <\/span>RSP<\/b>.\u00a0 With such a top-heavy S&P, several experts have opined that investors may wish to switch to the equal-weighted S&P to mitigate the risk of a tech bubble.\u00a0\u00a0<\/span><\/p>\n

Decreasing a 45% weighting to the top 10 stocks in the S&P 500 Index to a 2% aggregate weight does decrease exposure to a tech bubble.\u00a0 At the same time, however, it increases exposure to other stocks in the index that have exposures to other industries and other economic factors.\u00a0 Since all 500 stocks comprise 0.2% of an equally weighted portfolio, any selection of 10 stocks comprises the same 2%.\u00a0 Equalizing exposure for tech leaders to other stocks \u2013 if they can be found \u2013 with similar ratios of expected return to expected risk level sounds to us like an attractive strategy.\u00a0 However, all 500 stocks in the index at a given time may not have similarly attractive profiles.\u00a0 So, for those who prefer an equally weighted portfolio, what S&P 500 companies might you want to examine more closely before allocating equivalent capital to their stocks as you do to the stocks in the S&P 500?<\/span><\/p>\n

I ran that exercise in this week\u2019s ValuEngine Screen.\u00a0 The objective was to find out how many stocks in the S&P 500 earned our lowest rank of <\/span>1 <\/b>(Strong Sell) for year-ahead performance according to our predictive model and also were in the most overvalued 25% of the ValuEngine universe according to our valuation model.\u00a0 The answer was 10.\u00a0 In contrast to \u201cThe Magnificent Seven.\u201d I dubbed the stocks in this exercise in bottom fishing as \u201cThe Terrible Ten.\u201d\u00a0 If you buy <\/span>RSP<\/b>, these 10 stocks account for the identical 2% of your portfolio as the top ten.<\/span><\/p>\n

Current ValuEngine reports on these stocks or ETFS can be viewed<\/b> HERE<\/b><\/a><\/h6>\n

Here is a brief synopsis of the relevant companies:<\/span><\/p>\n

    \n
  1. Steel Dynamics (<\/span>STLD) <\/b>– <\/b>Steel Dynamics, Inc., together with its subsidiaries, operates as a steel producer and metal recycler in the United States. It operates through three segments: Steel Operations, Metals Recycling Operations, and Steel Fabrication Operations. The Steel Operations segment offers hot rolled, cold rolled, and coated steel products; parallel flange beams and channel sections, flat bars, large unequal leg angles, and reinforcing bars, as well as standard strength carbon, intermediate alloy hardness, and premium grade rail products; engineered special-bar-quality products, merchant-bar-quality products, and other engineered round steel bars; channels, angles, flats, merchant rounds, and reinforcing steel bars; and specialty shapes and light structural steel products.\u00a0 \u00a0Steel Dynamics, Inc. was founded in 1993 and is headquartered in Fort Wayne, Indiana.<\/span><\/li>\n
  2. Nucor Inc. (<\/span>NUE<\/b>) – Nucor Corporation engages in the manufacture and sale of steel and steel products. The company’s Steel Mills segment produces hot-rolled, cold-rolled, and galvanized sheet steel products; plate steel products; wide-flange beams, beam blanks, and H-piling and sheet piling products; and bar steel products, such as blooms, billets, concrete reinforcing and merchant bars, and engineered special bar quality products.\u00a0The company’s Raw Materials segment produces direct reduced iron (DRI); brokers ferrous and nonferrous metals, pig iron, hot briquetted iron, and DRI; supplies ferro-alloys; and processes ferrous and nonferrous scrap metal. The company was founded in 1905 and is headquartered in Charlotte, North Carolina.<\/span><\/li>\n
  3. CF Industries (<\/span>CF<\/b>) \u2013 CF Industries Holdings, Inc. manufactures and sells hydrogen and nitrogen products for energy, fertilizer, emissions abatement, and other industrial activities worldwide. Its principal products include anhydrous ammonia, granular urea, urea ammonium nitrate, and ammonium nitrate products. The company also offers diesel exhaust fluid, urea liquor, nitric acid, and aqua ammonia products; and compound fertilizer products with nitrogen, phosphorus, and potassium. It primarily serves cooperatives, independent fertilizer distributors, traders, wholesalers, and industrial users. The company was founded in 1946 and is headquartered in Deerfield, Illinois.<\/span><\/li>\n
  4. Valero Energy (VLO<\/b>) – Valero Energy Corporation manufactures, markets, and sells transportation fuels and petrochemical products in the United States, Canada, the United Kingdom, Ireland, Latin America, and internationally<\/span>. It operates through three segments: Refining, Renewable Diesel, and Ethanol. <\/span>It sells its refined products through wholesale rack and bulk markets; and through outlets under the Valero, Beacon, Diamond Shamrock, Shamrock, Ultramar, and Texaco brands. The company also produces and sells ethanol, dry distiller grains, syrup, and inedible corn oil primarily to animal feed customers<\/span>.\u00a0 Valero Energy Corporation was founded in 1980 and is headquartered in San Antonio, Texas.<\/span><\/li>\n
  5. Skyworks Solutions (<\/span>SWKS<\/b>) – Skyworks Solutions, Inc., together with its subsidiaries, designs, develops, manufactures, and markets proprietary semiconductor products in the United States, China, South Korea, Taiwan, Europe, the Middle East, Africa, and the rest of Asia-Pacific. Its product portfolio includes amplifiers, antenna tuners, attenuators, automotive tuners and digital radios, DC\/DC converters, demodulators, detectors, diodes, wireless analog system on chip products, directional couplers, diversity receive modules, filters, front-end modules, hybrids, light emitting diode drivers, low noise amplifiers, mixers, modulators, opto-couplers\/opto-isolators, phase locked loops, phase shifters, power dividers\/combiners, power over ethernet, power isolators, receivers, switches, synthesizers, timing devices, voltage controlled oscillators\/synthesizers, and voltage regulators\u00a0 The company was founded in 1962 and is based in Irvine, California.. <\/span><\/li>\n
  6. Microchip Technology (MCHP<\/b>) – Microchip Technology Incorporated develops, manufactures, and sells smart, connected, and secure embedded control solutions in the Americas, Europe, and Asia. The company offers general purpose 8-bit, 16-bit, and 32-bit microcontrollers; 32-bit embedded mixed-signal microprocessors; and specialized microcontrollers for automotive, industrial, computing, communications, lighting, power supplies, motor control, human machine interface, security, wired connectivity, and wireless connectivity applications. The firm was incorporated in 1989 and is based in Chandler, AZ.<\/span><\/li>\n
  7. Marathon Petroleum (MPC<\/b>) – Marathon Petroleum Corporation, together with its subsidiaries, operates as an integrated downstream energy company primarily in the United States. It operates in two segments, Refining & Marketing, and Midstream. The Refining & Marketing segment refines crude oil and other feedstocks at its refineries.\u00a0 It also purchases refined products and ethanol for resale and distributes refined products, including renewable diesel. Its refined products include transportation fuels, such as reformulated gasolines and blend-grade gasolines; heavy fuel oil; and asphalt. The company was founded in 1887 and is headquartered in Findlay, Ohio.<\/span><\/li>\n
  8. Viatris, Inc. (<\/span>VTRS<\/b>) – Viatris Inc. operates as a healthcare company worldwide. The company operates in four segments: Developed Markets, Greater China, JANZ, and Emerging Markets. It offers prescription brand drugs, generic drugs, complex generic drugs, biosimilars, and active pharmaceutical ingredients (APIs). The company offers drugs in various therapeutic areas, including non communicable and infectious diseases; biosimilars in the areas of oncology, immunology, endocrinology, ophthalmology, and dermatology; and APIs for antibacterial, central nervous system agents, antihistamines\/anti-asthmatics, cardiovascular, antivirals, antidiabetics, antifungals, and proton pump inhibitor areas, as well as support services, such as diagnostic clinics, educational seminars, and digital tools to help patients better manage their health. The company was founded in 1961 and is headquartered in Canonsburg, Pennsylvania.\u00a0<\/span><\/li>\n
  9. KeyCorp Inc. (<\/span>KEY<\/b>) – KeyCorp operates as the holding company for KeyBank National Association that provides various retail and commercial banking products and services in the United States. It operates in two segments, Consumer Bank and Commercial Bank. The company offers various deposits, investment products and services including personal finance and financial wellness, student loan refinancing, mortgage and home equity, lending, credit card, treasury, business advisory, wealth management, asset management, investment, cash management, portfolio management, and trust and related services to individuals and small and medium-sized businesses.\u00a0 The company was founded in 1849 and is headquartered in Cleveland, Ohio.<\/span><\/li>\n
  10. International Paper (<\/span>IP<\/b>) – International Paper Company produces renewable fiber-based packaging and pulp products in North America, Latin America, Europe, and North Africa. It operates through the Industrial Packaging and Global Cellulose Fibers segment. The company’s Industrial Packaging segment manufactures containerboards, including linerboard, medium, whitetop, recycled linerboard, recycled medium, and saturating kraft. Its Global Cellulose Fibers segment provides fluff, market, and specialty pulps that are used in absorbent hygiene products, such as baby diapers, feminine care, adult incontinence, and other non-woven products; tissue and paper products; and non-absorbent end applications, including textiles, filtration, construction material, paints and coatings applications. In addition, it sells its products directly to end users and converters, as well as through agents, resellers, and distributors. The company was founded in 1898 and is headquartered in Memphis, Tennessee.<\/span><\/li>\n<\/ol>\n

    The following two tables compare the 10 companies on fundamental ratios and historical price-related factors.\u00a0 ValuEngine\u2019s proprietary measures, Rating, Fair Value and Forecast 1-Yr. Returns are also included.\u00a0 Universe percentile ranks with 99 being the best and 1 being the worst are also included.\u00a0 The Fair Value measure applies our valuation model to the current price to determine the \u201cfair value\u201d price of the stock.\u00a0\u00a0<\/span><\/p>\n

    Current ValuEngine reports on these stocks or ETFS can be viewed<\/b> HERE<\/b><\/a><\/h6>\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
    Ticker<\/b><\/td>\nSTLD<\/b><\/td>\nNUE<\/b><\/td>\nCF<\/b><\/td>\nVLO<\/b><\/td>\nSWKS<\/b><\/td>\n<\/tr>\n
    Name<\/b><\/td>\nSTEEL DYNAMICS<\/span><\/td>\nNUCOR CORP<\/span><\/td>\nCF INDUS HLDGS<\/span><\/td>\nVALERO ENERGY<\/span><\/td>\nSKYWORKS SOLUTN<\/span><\/td>\n<\/tr>\n
    Sector<\/b><\/td>\nBasic Materials<\/span><\/td>\nBasic Materials<\/span><\/td>\nBasic Materials<\/span><\/td>\nOils-Energy<\/span><\/td>\nComputer and Technology<\/span><\/td>\n<\/tr>\n
    Industry<\/b><\/td>\nSteel<\/span><\/p>\n

    producers<\/span><\/td>\n

    		Steel<\/span><\/p>\n

    producers<\/span><\/td>\n

    		Fertilizers<\/span><\/td>\nOIL Refining & Marketing<\/span><\/td>\nSemi-radio Freq<\/span><\/td>\n<\/tr>\n
    \nMarket Price<\/b><\/td>\n124.99<\/b><\/td>\n186.54<\/b><\/td>\n78.08<\/b><\/td>\n143.06<\/b><\/td>\n105.05<\/b><\/td>\n<\/tr>\n
    Avg Volume<\/span><\/td>\n1316966<\/span><\/td>\n1525253<\/span><\/td>\n2048794<\/span><\/td>\n3269254<\/span><\/td>\n1938604<\/span><\/td>\n<\/tr>\n
    Rating<\/b><\/td>\n1<\/b><\/td>\n1<\/b><\/td>\n1<\/b><\/td>\n1<\/b><\/td>\n1<\/b><\/td>\n<\/tr>\n
    Fair Value<\/span><\/td>\n67.32<\/span><\/td>\n97.05<\/span><\/td>\n58.13<\/span><\/td>\n106.42<\/span><\/td>\n76.47<\/span><\/td>\n<\/tr>\n
    Valuation(%)<\/b><\/td>\n85.66<\/b><\/td>\n92.21<\/b><\/td>\n34.31<\/b><\/td>\n34.43<\/b><\/td>\n37.38<\/b><\/td>\n<\/tr>\n
    Valuation Rank<\/span><\/td>\n5<\/span><\/td>\n5<\/span><\/td>\n21<\/span><\/td>\n21<\/span><\/td>\n19<\/span><\/td>\n<\/tr>\n
    Forecast 1-Mon Price Change (%)<\/b><\/td>\n-1.65<\/b><\/td>\n-1.45<\/b><\/td>\n-1.37<\/b><\/td>\n-1.27<\/b><\/td>\n-1.23<\/b><\/td>\n<\/tr>\n
    1-Mon Forecast Rank<\/span><\/td>\n1<\/span><\/td>\n2<\/span><\/td>\n2<\/span><\/td>\n2<\/span><\/td>\n3<\/span><\/td>\n<\/tr>\n
    Forecast 1-Yr Price Change (%)<\/b><\/td>\n-19.52<\/b><\/td>\n-17.24<\/b><\/td>\n-16.32<\/b><\/td>\n-15.11<\/b><\/td>\n-14.69<\/b><\/td>\n<\/tr>\n
    1-Yr Forecast Rank<\/span><\/td>\n1<\/span><\/td>\n2<\/span><\/td>\n2<\/span><\/td>\n2<\/span><\/td>\n3<\/span><\/td>\n<\/tr>\n
    Last 12-Mon Price Change (%)<\/b><\/td>\n3.00<\/b><\/td>\n14.03<\/b><\/td>\n-10.05<\/b><\/td>\n7.87<\/b><\/td>\n-13.09<\/b><\/td>\n<\/tr>\n
    Momentum Rank<\/span><\/td>\n58<\/span><\/td>\n75<\/span><\/td>\n36<\/span><\/td>\n67<\/span><\/td>\n33<\/span><\/td>\n<\/tr>\n
    Sharpe Ratio<\/b><\/td>\n0.58<\/b><\/td>\n0.50<\/b><\/td>\n0.28<\/b><\/td>\n0.19<\/b><\/td>\n0.20<\/b><\/td>\n<\/tr>\n
    Sharpe Ratio Rank<\/span><\/td>\n91<\/span><\/td>\n89<\/span><\/td>\n79<\/span><\/td>\n74<\/span><\/td>\n74<\/span><\/td>\n<\/tr>\n
    5-Yr Avg Price Change (%)<\/b><\/td>\n23.87<\/b><\/td>\n22.32<\/b><\/td>\n10.96<\/b><\/td>\n9.17<\/b><\/td>\n7.16<\/b><\/td>\n<\/tr>\n
    5-Yr Price Change Rank<\/span><\/td>\n95<\/span><\/td>\n95<\/span><\/td>\n85<\/span><\/td>\n82<\/span><\/td>\n78<\/span><\/td>\n<\/tr>\n
    Volatility(%)<\/b><\/td>\n40.93<\/b><\/td>\n44.35<\/b><\/td>\n38.74<\/b><\/td>\n47.70<\/b><\/td>\n35.67<\/b><\/td>\n<\/tr>\n
    Volatility Rank<\/span><\/td>\n44<\/span><\/td>\n41<\/span><\/td>\n46<\/span><\/td>\n38<\/span><\/td>\n50<\/span><\/td>\n<\/tr>\n
    EPS Growth(%)<\/b><\/td>\n-28.61<\/b><\/td>\n-33.12<\/b><\/td>\n-22.61<\/b><\/td>\n-32.36<\/b><\/td>\n-11.82<\/b><\/td>\n<\/tr>\n
    EPS Growth Rank<\/span><\/td>\n7<\/span><\/td>\n6<\/span><\/td>\n8<\/span><\/td>\n6<\/span><\/td>\n14<\/span><\/td>\n<\/tr>\n
    Avg EPS Suprise(%)<\/b><\/td>\n0.01<\/b><\/td>\n0.10<\/b><\/td>\n0.07<\/b><\/td>\n0.11<\/b><\/td>\n0.04<\/b><\/td>\n<\/tr>\n
    Suprise Rank<\/span><\/td>\n38<\/span><\/td>\n63<\/span><\/td>\n56<\/span><\/td>\n63<\/span><\/td>\n48<\/span><\/td>\n<\/tr>\n
    Market Cap<\/b><\/td>\n20.2<\/b><\/td>\n45.9<\/b><\/td>\n14.9<\/b><\/td>\n48.7<\/b><\/td>\n16.8<\/b><\/td>\n<\/tr>\n
    Size Rank<\/span><\/td>\n91<\/span><\/td>\n96<\/span><\/td>\n89<\/span><\/td>\n96<\/span><\/td>\n90<\/span><\/td>\n<\/tr>\n
    Dividend Yield (%)<\/b><\/td>\n1.4%<\/b><\/td>\n1.2%<\/b><\/td>\n2.6%<\/b><\/td>\n3.0%<\/b><\/td>\n2.6%<\/b><\/td>\n<\/tr>\n
    P\/E Ratio<\/span><\/td>\n8.5<\/span><\/td>\n10.6<\/span><\/td>\n10.3<\/span><\/td>\n6.2<\/span><\/td>\n15.5<\/span><\/td>\n<\/tr>\n
    P\/E Rank<\/b><\/td>\n87<\/b><\/td>\n81<\/b><\/td>\n82<\/b><\/td>\n94<\/b><\/td>\n67<\/b><\/td>\n<\/tr>\n
    M\/B Ratio<\/span><\/td>\n2.5<\/span><\/td>\n3.2<\/span><\/td>\n2.4<\/span><\/td>\n1.7<\/span><\/td>\n6.3<\/span><\/td>\n<\/tr>\n
    M\/B Rank<\/b><\/td>\n41<\/b><\/td>\n35<\/b><\/td>\n43<\/b><\/td>\n53<\/b><\/td>\n21<\/b><\/td>\n<\/tr>\n
    P\/S Ratio<\/span><\/td>\n1.1<\/span><\/td>\n1.3<\/span><\/td>\n1.9<\/span><\/td>\n0.3<\/span><\/td>\n3.5<\/span><\/td>\n<\/tr>\n
    P\/S Rank<\/b><\/td>\n66<\/b><\/td>\n61<\/b><\/td>\n47<\/b><\/td>\n88<\/b><\/td>\n31<\/b><\/td>\n<\/tr>\n
    Actual EPS<\/span><\/td>\n14.62<\/span><\/td>\n17.64<\/span><\/td>\n7.57<\/span><\/td>\n22.93<\/span><\/td>\n6.80<\/span><\/td>\n<\/tr>\n
    Forecast EPS<\/b><\/td>\n10.44<\/span><\/td>\n11.80<\/span><\/td>\n5.86<\/span><\/td>\n15.51<\/span><\/td>\n5.99<\/span><\/td>\n<\/tr>\n
    Beta<\/span><\/td>\n1.40<\/span><\/td>\n1.61<\/span><\/td>\n1.04<\/span><\/td>\n1.52<\/span><\/td>\n1.41<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

     <\/p>\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
    Ticker<\/b><\/td>\nMCHP<\/b><\/td>\nMPC<\/b><\/td>\nVTRS<\/b><\/td>\nKEY<\/b><\/td>\nIP<\/b><\/td>\n<\/tr>\n
    Name<\/b><\/td>\nMICROCHIP TECH<\/span><\/td>\nMARATHON PETROL<\/span><\/td>\nVIATRIS INC<\/span><\/td>\nKEYCORP NEW<\/span><\/td>\nINTL PAPER<\/span><\/td>\n<\/tr>\n
    Sector<\/b><\/td>\nComputer and Technology<\/span><\/td>\nOils-Energy<\/span><\/td>\nMedical<\/span><\/td>\nFinance<\/span><\/td>\nBasic Materials<\/span><\/td>\n<\/tr>\n
    Industry<\/b><\/td>\nSemi-analog & Mixed<\/span><\/td>\nOIL Refining & Marketing<\/span><\/td>\nMedical Services<\/span><\/td>\nBanks-major Regional<\/span><\/td>\nPaper & Paper Products<\/span><\/td>\n<\/tr>\n
    Market Price<\/b><\/td>\n85.44<\/b><\/td>\n169.97<\/b><\/td>\n11.68<\/b><\/td>\n13.89<\/b><\/td>\n35.26<\/b><\/td>\n<\/tr>\n
    Avg Volume<\/span><\/td>\n5107286<\/span><\/td>\n3065611<\/span><\/td>\n8935946<\/span><\/td>\n1685063<\/span><\/td>\n3379160<\/span><\/td>\n<\/tr>\n
    Rating<\/b><\/td>\n1<\/b><\/td>\n1<\/b><\/td>\n1<\/b><\/td>\n1<\/b><\/td>\n1<\/b><\/td>\n<\/tr>\n
    Fair Value<\/span><\/td>\n62.60<\/span><\/td>\n115.21<\/span><\/td>\n8.71<\/span><\/td>\n10.15<\/span><\/td>\n25.60<\/span><\/td>\n<\/tr>\n
    Valuation(%)<\/b><\/td>\n36.49<\/b><\/td>\n47.53<\/b><\/td>\n34.17<\/b><\/td>\n36.86<\/b><\/td>\n37.75<\/b><\/td>\n<\/tr>\n
    Valuation Rank<\/span><\/td>\n19<\/span><\/td>\n13<\/span><\/td>\n21<\/span><\/td>\n19<\/span><\/td>\n18<\/span><\/td>\n<\/tr>\n
    Forecast 1-Mon Price Change (%)<\/b><\/td>\n-1.12<\/b><\/td>\n-1.12<\/b><\/td>\n-0.99<\/b><\/td>\n-1.15<\/b><\/td>\n-1.01<\/b><\/td>\n<\/tr>\n
    1-Mon Forecast Rank<\/span><\/td>\n3<\/span><\/td>\n3<\/span><\/td>\n5<\/span><\/td>\n3<\/span><\/td>\n4<\/span><\/td>\n<\/tr>\n
    Forecast 1-Yr Price Change (%)<\/b><\/td>\n-13.41<\/b><\/td>\n-13.38<\/b><\/td>\n-11.94<\/b><\/td>\n-13.76<\/b><\/td>\n-12.10<\/b><\/td>\n<\/tr>\n
    1-Yr Forecast Rank<\/span><\/td>\n3<\/span><\/td>\n3<\/span><\/td>\n5<\/span><\/td>\n3<\/span><\/td>\n4<\/span><\/td>\n<\/tr>\n
    Last 12-Mon Price Change (%)<\/b><\/td>\n0.65<\/b><\/td>\n40.77<\/b><\/td>\n-0.34<\/b><\/td>\n-28.95<\/b><\/td>\n-8.11<\/b><\/td>\n<\/tr>\n
    Momentum Rank<\/span><\/td>\n54<\/span><\/td>\n90<\/span><\/td>\n50<\/span><\/td>\n19<\/span><\/td>\n38<\/span><\/td>\n<\/tr>\n
    Sharpe Ratio<\/b><\/td>\n0.38<\/b><\/td>\n0.36<\/b><\/td>\n-0.46<\/b><\/td>\n-0.06<\/b><\/td>\n-0.19<\/b><\/td>\n<\/tr>\n
    Sharpe Ratio Rank<\/span><\/td>\n84<\/span><\/td>\n83<\/span><\/td>\n20<\/span><\/td>\n44<\/span><\/td>\n34<\/span><\/td>\n<\/tr>\n
    5-Yr Avg Price Change (%)<\/b><\/td>\n15.03<\/b><\/td>\n18.32<\/b><\/td>\n-18.68<\/b><\/td>\n-2.51<\/b><\/td>\n-5.61<\/b><\/td>\n<\/tr>\n
    5-Yr Price Change\u00a0 Rank<\/span><\/td>\n90<\/span><\/td>\n93<\/span><\/td>\n24<\/span><\/td>\n42<\/span><\/td>\n36<\/span><\/td>\n<\/tr>\n
    Volatility(%)<\/b><\/td>\n39.57<\/b><\/td>\n50.70<\/b><\/td>\n40.54<\/b><\/td>\n42.50<\/b><\/td>\n29.76<\/b><\/td>\n<\/tr>\n
    Volatility Rank<\/span><\/td>\n46<\/span><\/td>\n36<\/span><\/td>\n45<\/span><\/td>\n43<\/span><\/td>\n57<\/span><\/td>\n<\/tr>\n
    EPS Growth(%)<\/b><\/td>\n-49.41<\/b><\/td>\n-29.22<\/b><\/td>\n-5.23<\/b><\/td>\n5.08<\/b><\/td>\n-6.73<\/b><\/td>\n<\/tr>\n
    EPS Growth Rank<\/span><\/td>\n4<\/span><\/td>\n7<\/span><\/td>\n19<\/span><\/td>\n32<\/span><\/td>\n18<\/span><\/td>\n<\/tr>\n
    Avg EPS Surprise (%)<\/b><\/td>\n0.01<\/b><\/td>\n0.24<\/b><\/td>\n0.06<\/b><\/td>\n0.05<\/b><\/td>\n0.19<\/b><\/td>\n<\/tr>\n
    Suprise Rank<\/span><\/td>\n38<\/span><\/td>\n78<\/span><\/td>\n53<\/span><\/td>\n51<\/span><\/td>\n74<\/span><\/td>\n<\/tr>\n
    Market Cap<\/b><\/td>\n46.2<\/b><\/td>\n64.5<\/b><\/td>\n14.0<\/b><\/td>\n13.0<\/b><\/td>\n12.2<\/b><\/td>\n<\/tr>\n
    Size Rank<\/span><\/td>\n96<\/span><\/td>\n97<\/span><\/td>\n89<\/span><\/td>\n88<\/span><\/td>\n87<\/span><\/td>\n<\/tr>\n
    Dividend Yield (%)<\/b><\/td>\n2.0%<\/b><\/td>\n1.9%<\/b><\/td>\n4.2%<\/b><\/td>\n5.9%<\/b><\/td>\n5.3%<\/b><\/td>\n<\/tr>\n
    P\/E Ratio<\/span><\/td>\n16.0<\/span><\/td>\n7.7<\/span><\/td>\n3.9<\/span><\/td>\n11.8<\/span><\/td>\n17.0<\/span><\/td>\n<\/tr>\n
    P\/E Rank<\/b><\/td>\n66<\/b><\/td>\n90<\/b><\/td>\n98<\/b><\/td>\n77<\/b><\/td>\n64<\/b><\/td>\n<\/tr>\n
    M\/B Ratio<\/span><\/td>\n6.6<\/span><\/td>\n2.7<\/span><\/td>\n0.7<\/span><\/td>\n1.1<\/span><\/td>\n2.1<\/span><\/td>\n<\/tr>\n
    M\/B Rank<\/b><\/td>\n20<\/b><\/td>\n39<\/b><\/td>\n84<\/b><\/td>\n70<\/b><\/td>\n47<\/b><\/td>\n<\/tr>\n
    P\/S Ratio<\/span><\/td>\n5.2<\/span><\/td>\n0.4<\/span><\/td>\n0.9<\/span><\/td>\n1.3<\/span><\/td>\n0.6<\/span><\/td>\n<\/tr>\n
    P\/S Rank<\/b><\/td>\n23<\/b><\/td>\n85<\/b><\/td>\n70<\/b><\/td>\n62<\/b><\/td>\n78<\/b><\/td>\n<\/tr>\n
    Actual EPS<\/span><\/td>\n5.33<\/span><\/td>\n22.12<\/span><\/td>\n2.97<\/span><\/td>\n1.18<\/span><\/td>\n2.08<\/span><\/td>\n<\/tr>\n
    Forecast EPS<\/b><\/td>\n2.70<\/b><\/td>\n15.65<\/b><\/td>\n2.81<\/b><\/td>\n1.24<\/b><\/td>\n1.94<\/b><\/td>\n<\/tr>\n
    Beta<\/span><\/td>\n1.66<\/span><\/td>\n1.64<\/span><\/td>\n1.19<\/span><\/td>\n1.35<\/span><\/td>\n1.00<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

     <\/p>\n

    Current ValuEngine reports on these stocks or ETFS can be viewed<\/b> HERE<\/b><\/a><\/h6>\n

    OBSERVATIONS<\/b><\/p>\n

      \n
    1. ValuEngine\u2019s predictive metrics on all 10 stocks are for substantial declines.\u00a0 They are all rated <\/span>1 <\/b>(Strong Sell) by our time tested predictive model. The range of losses projected for the next 12 months spans from 11.9% to 19.5%.\u00a0 All ten of these stocks are rated between 34% and 92% overvalued by our valuation model with the result that each one has a current price substantially higher than its Fair Value price. All of the companies associated with these stocks have negative earnings growth with regional bank KeyCorp (<\/span>KEY<\/b>) being the sole exception. The same 9 of 10 also have further declines in EPS predicted for 2024.\u00a0 8 of 10 are in the top half of price volatility.\u00a0 \u00a0 <\/span>Given our models\u2019 sour assessments, it might be surprising that all of them have attractive absolute Price\/Earnings Ratios ranging from a low of 3.9 to a high of 17, all much lower than the P\/E ratios of the cap-weighted S&P 500 and the Nasdaq-100.\u00a0 This can be principally attributed to the fact that P\/E is backwards looking whereas the valuation model is built to be more forward looking, considering price-to-earnings-growth (PEG ratio) as more important among the many factors it considers.<\/li>\n
    2. Equal-weighted <\/span>RSP <\/b>has more evenly distributed sector weights than <\/span>SPLG <\/b>(or the more expensive <\/span>SPY<\/b> or other cap-weighted S&P 500 ETFs).\u00a0 This group illustrates why as only 2 of the 10 stocks are in the computer and technology sector.\u00a0 4 of the 10 are in Basic Materials (Steel, Fertilizers and Paper).\u00a0 2 of the 10 are in Oil\/Energy. One apiece are in Banks and Medical Services.<\/span><\/li>\n
    3. The two tech companies, Skyworks (<\/span>SWKS<\/b>) and Microchip Technologies (<\/span>MCHP<\/b>) both performed very poorly during the past 12 months compared with <\/span>XLK, <\/b>the Select Sector SPDR Technology Index ETF.\u00a0 The latter has returned more than 30% during the past 12 months.<\/span><\/li>\n
    4. Other than Steel Dynamics (<\/span>STLD<\/b>) which started in 1993 and Microchip which started in 1989, these companies have been around from between 61 years and 173 years.\u00a0 From a corporate life cycle perspective, many of these may be well in the late part of the maturity phase and\/or already in the early parts of the decline phase.\u00a0 Note that one of the jobs of the Standard & Poor\u2019s Index Committee is to identify and eliminate stocks well into the decline stage.\u00a0 I believe that it is safe to say at this time that stocks such as Nucor (<\/span>NUE<\/b>), CF Industries (<\/span>CF<\/b>) and Keycorp (<\/span>KEY<\/b>) are currently bought more by index funds than investors specifically looking to take or increase stakes in these companies. Therefore when the day comes that they are dropped from the S&P 500, their prices will be susceptible to more precipitous declines.\u00a0 <\/span><\/li>\n
    5. The major positive for many holders of these stocks is dividend yield. All except for NUE <\/b>and <\/span>STLD<\/b> have considerably higher yields than the S & P 500.\u00a0 The highest yields belong to <\/span>KEY<\/b> and International Paper (<\/span>IP<\/b>), both more than 5%.\u00a0 In general, \u201cold economy\u201d materials, energy and utility stocks will yield more than tech stocks and early stage stocks.\u00a0 Generous dividend yields are purposeful incentives for income-oriented investors to buy and hold these stocks.\u00a0 Do not expect such stocks to keep pace in a bull market.\u00a0 However, they may not decline as much or at all while providing income in a bear market.<\/span><\/li>\n<\/ol>\n
      Financial Advisory Services based on ValuEngine research available:\u00a0<\/b><\/h6>\n
      www.ValuEngineCapital.com<\/b><\/a><\/h6>\n

      SUMMARY<\/b><\/p>\n

      The sobriquet \u201cMagnificent Seven\u201d for market leadership stocks linked to technologies with seemingly unlimited upside does not guarantee that these stocks will still be producing handsome investment returns in the next 12 months.\u00a0 Similarly, my dubbing these <\/span>1<\/b>-rated S&P 500 stocks \u201cTerrible Ten\u201d does not mean that they will fulfill our models\u2019 prognostications and underperform during the same period.\u00a0\u00a0<\/span><\/p>\n

      Since investors read many more articles about stocks to consider buying than stocks to avoid or consider selling, I thought it was useful to highlight some potential negative aspects of equally weighting an S&P 500 indexed portfolio.\u00a0 After all, <\/span>SPLG <\/b>(SPDR S&P 500 Index ETF) outperformed <\/span>RSP<\/b> by nearly 1300 basis points (or +12.95%) in calendar year 2023.\u00a0 We project higher price gains again in 2024 for <\/span>SPLG<\/b> than for <\/span>RSP.\u00a0 <\/b>No one knows whether all this analysis will be right or wrong until after the fact.\u00a0 The point of this article is to keep readers informed of what the signals mean and what the potential tradeoffs are.<\/span><\/p>\n

      _______________________________________________________________<\/span><\/p>\n

      By Herbert Blank<\/b><\/h5>\n
      Senior Quantitative Analyst, ValuEngine Inc<\/b><\/h5>\n
      www.ValuEngine.com<\/b><\/a><\/h5>\n
      support@ValuEngine.com<\/b><\/h5>\n
      All of the approximately 5,000 stocks, 16 sector groups, 140 industries, and 600 ETFs have been updated on<\/b> www.ValuEngine.com<\/b><\/a><\/h5>\n
      Financial Advisory Services based on ValuEngine research available through<\/b> ValuEngine Capital Management, LLC<\/b><\/a><\/h5>\n
      Free Two Week Trial to all 5,000 plus equities covered by ValuEngine<\/b> HERE<\/b><\/a><\/h5>\n

      Subscribers log in<\/b> HERE<\/b><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

      \u201cThe Magnificent Seven\u201d was the most popular sobriquet among stock market strategists, portfolio managers and reporters in 2023.\u00a0 Stocks such as Google, Nvidia, Tesla, Amazon, Microsoft, Meta, Apple dominated performance and volume charts.\u00a0 Almost unnoticed, Broadcom pushed its way to 4th in Market Cap in the Nasdaq and more than doubled in price last year … Read more<\/a><\/p>\n","protected":false},"author":4,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[130,1,39],"tags":[1302,2299,1731,2309,2310,2308,2307,2304,2313,2303,2302,903,2297,2298,1938,1858,2301,2290,1726,2296,618,1699,1687,196,2312,2311,2300,28,1656,1659,2305,1062,2306],"_links":{"self":[{"href":"http:\/\/blog.valuengine.com\/index.php\/wp-json\/wp\/v2\/posts\/3258"}],"collection":[{"href":"http:\/\/blog.valuengine.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/blog.valuengine.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/blog.valuengine.com\/index.php\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"http:\/\/blog.valuengine.com\/index.php\/wp-json\/wp\/v2\/comments?post=3258"}],"version-history":[{"count":1,"href":"http:\/\/blog.valuengine.com\/index.php\/wp-json\/wp\/v2\/posts\/3258\/revisions"}],"predecessor-version":[{"id":3259,"href":"http:\/\/blog.valuengine.com\/index.php\/wp-json\/wp\/v2\/posts\/3258\/revisions\/3259"}],"wp:attachment":[{"href":"http:\/\/blog.valuengine.com\/index.php\/wp-json\/wp\/v2\/media?parent=3258"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/blog.valuengine.com\/index.php\/wp-json\/wp\/v2\/categories?post=3258"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/blog.valuengine.com\/index.php\/wp-json\/wp\/v2\/tags?post=3258"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}