ValuEngine Weekly: Construction Stocks,Chevron, Valuations, and More

8/20/2019 ValuEngine Weekly: Construction Stocks,Chevron, Valuations, and More

1/11

August 21, 2015

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VALUATION WATCH: Overvalued stocks now make up 42!4" o# ourstocks ass$%ned a valuat$on and &!4'" o# t(ose e)u$t$es are calculated to*e overvalued *+ 2," or more -our sectors are calculated to *eovervalued..w$t( one at or near dou*le d$%$ts

MARKET OVERVIEW

Inde/ 0tarted week -r$da+ 1 C(an%e C(an%e " +td

3IA %&&(")) %))*") .556,7 .44'" .7!!"

NA03A8 +,(" &." .2459 .49!" &22"

U00;LL 2,,, %(,*"( %%))". .4267 .!'4" .!&6"

0


2/11

SECTOR OVERVIEW

0ector C(an%e T3 =T3 Valuat$on Last &2.

eturn

1>;

at$oAerospace -%"&%/ -",*/ -,"%)/ *",%/ overvalued -")%/ (,"*

Auto.T$res.Trucks -("./ -"/ -+",%/ *"+&/ undervalued -%"()/ %+",*

?as$c ater$als -,"&,/ -%"&/ -%(".&/ %&")/ undervalued -"/ (%")

?us$ness 0erv$ces -%")%/ -"+&/ %"/ (".&/ overvalued -")+/ ("+&

Computer and Tec(nolo%+ -("+&/ -"%/ -"%+/ "%./ undervalued -)"%&/ (.")

Construct$on -%"(/ -%"%./ %")%/ )"&(/ undervalued -%"../ (")*

Consumer 3$scret$onar+ -("%/ -")/ ",/ %"(+/ undervalued -"%*/ (&"++

Consumer 0taples -%"+%/ -"%(/ -(")/ "&)/ overvalued -")./ (("+

-$nance -%"(/ -("&,/ -,"+&/ %",/ undervalued -",)/ %&",*

Industr$al 1roducts -%"**/ -"./ -)"(,/ .",,/ undervalued -%("./ %.")

ed$cal -("&,/ -+"+)/ *"((/ )"./ overvalued ."&%/ %"

ult$.0ector Con%lomerates -%")./ -+")/ -)"/ ",+/ undervalued -&"/ (("%*

O$ls.;ner%+ -("%/ -*"&,/ -(,")%/ (%"%/ undervalued -."&/ (("&

eta$l.W(olesale -(",%/ -"(/ -+",(/ ,"%+/ undervalued ,")+/ (",%

Transportat$on -("&/ -)"&/ -*"%)/ %,"(./ undervalued -%"(&/ %)"(&

Ut$l$t$es -%")./ -"()/ -)",,/ %"*./ undervalued -&",/ (,".*

Sector Talk—ConstructonBelow, we present the latest data on leading Construction Sector stocks from

our Professional Stock Analysis Service These results were filtered by market price andvolume--no results below 3$share or less than !""k sharesday volume#

Top.-$ve Construct$on 0ector 0tocks..0(ort.Term -orecast eturns

T$cker Compan+ Name arket 1r$ce Valuat$on Last &2. etrn

?L3 T0123I45 6071 ("&% 89: 89:

;-OI E8E7;< =063> I8 %&"% 89: (.*"(/

L=T0 4>I I853>T7IE> ."*& 89: ,"./

=L 7


3/11

Top.-$ve Construct$on 0ector 0tocks..Lon%.Term -orecast eturns


?L3 T0123I45 6071 ("&% 89: 89:

;-OI E8E7;< =063> I8 %&"% 89: (.*"(/L=T0 4>I I853>T7IE> ."*& 89: ,"./

=L 7 I86 ++". -%+"%./ ("+(/

C?I 6@I6:;0 27I5;E +" -%")/ -(&"/

Top.-$ve Construct$on 0ector 0tocks..ost Overvalued


;@1 E:;4E ?:TE7I:4> .,".* ",&/ -%&"&+/

I?1 I8>T:44E5 23I45 (."( ,"*/ %(%"+(/

3= 5 )"(% ("%,/ %%."*(/

L ?:7TI8 ?7T-?:T4 %))"*+ (%".*/ (*"(%/

W0 :5V 57:I8:; > (."(* (%"*/ )"&)/

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4/11

!ree "o#nloa$ %or Rea$ers

(s a 0onus to our Free Weekly #ewsletter su0scri0ers,we are offering a F.EE $W#&$( of one of our Stock .eports

Chevron C%&' is the fifth-largest integrated energy company in the world#

(ead)uartered in San *amon, California, and conducting business in appro+imately!" countries, this highly competitive corporation is engaged in every aspect of theoil and natural gas industry, including e+ploration and production refining, marketing

and transportation chemicals manufacturing and sales and power generation#

%./012421 *1C566127.T4528 %alu1ngine continues its (5/7

recommendation on C(1%*52 C5*9 for :"!;-"-:"# Based on the information we

have gathered and our resulting research, we feel that C(1%*52 C5*9 has theprobability to *50(/< 6.TC( average market performance for the ne+t year# The

company e+hibits .TT*.CT4%1 Company Si=e but 02.TT*.CT4%1 1arnings rowth*ate#

(s a 0onus to our #ewsletter readers,we are offering a F.EE $W#&$( of one of our Stock .eports

.ead our 1omplete etailed Valuation .eport on 1hevron H;;

http://www.valuengine.com/download/report/TMP_VE_TSLA_2015081403721.pdfhttp://www.valuengine.com/images/newsletter/weekly/150821CVXchart.ashxhttp://www.valuengine.com/download/report/TMP_VE_TSLA_2015081403721.pdf


5/11

!aluEngine "orecast

Target9rice>

1+pected*eturn

#$%onth ?@#:3 -"#":A

&$%onth "#3 !#:A

'$%onth !#:! :#@A

#$(ear ?@#" -"#:"A

)$(ear ?#? -3#!"A

&$(ear @#"@ !#?A

!aluation * Rankings!aluation !"#?A undervalued !aluation Rank D' :

#$% "orecast Return -"#":A #$% "orecast Return Rank @

#)$% Return -3?#;A %o+entu+ Rank D' :

Share Ratio "#! Share Ratio Rank D' :

-$( Avg Annual Return :#@@A -$( Avg Annual Rtn Rank ;@

!olatility !#;A !olatility Rank D' ??

E.ecte/ EPS 0rowth -3!#!@A EPS 0rowth Rank D' !!

%arket Ca 1billions2 !@#" Si3e Rank !""

4railing P5E Ratio !3# 4railing P5E Rank D' ?@

"orwar/ P5E Ratio !@# "orwar/ P5E Ratio Rank 3:

PE0 Ratio na PE0 Ratio Rank na

Price5Sales "#; Price5Sales Rank D' ?"

%arket56ook "#@@ %arket56ook Rank D' ?

6eta !#!! 6eta Rank 3@

Alha -"#? Alha Rank !

http://www.valuengine.com/ve/ValuationSummary#http://www.valuengine.com/ve/ValuationSummary#http://www.valuengine.com/ve/ValuationSummary#http://www.valuengine.com/ve/ValuationSummary#http://www.valuengine.com/ve/ValuationSummary#http://www.valuengine.com/ve/ValuationSummary#http://www.valuengine.com/ve/ValuationSummary#http://www.valuengine.com/ve/ValuationSummary#http://www.valuengine.com/ve/ValuationSummary#http://www.valuengine.com/ve/ValuationSummary#http://www.valuengine.com/ve/ValuationSummary#http://www.valuengine.com/ve/ValuationSummary#http://www.valuengine.com/ve/ValuationSummary#http://www.valuengine.com/charts/pricerating_jpg/CVX.jpghttp://www.valuengine.com/ve/ValuationSummary#http://www.valuengine.com/ve/ValuationSummary#http://www.valuengine.com/ve/ValuationSummary#http://www.valuengine.com/ve/ValuationSummary#http://www.valuengine.com/ve/ValuationSummary#http://www.valuengine.com/ve/ValuationSummary#http://www.valuengine.com/ve/ValuationSummary#http://www.valuengine.com/ve/ValuationSummary#


6/11

W&at's (ot

Valuatons ") On C&nese *ull +ack

%alu1ngine tracks more than ?""" 0S e)uities, .7*s, and foreign stock whichtrade on 0S e+changes as well as E!""" Canadian e)uities# Fhen 19S estimates areavailable for a given e)uity, our model calculates a level of mispricing or valuationpercentage for that e)uity based on earnings estimates and what the stock should

be worth if the market were totally rational and efficient--an academic e+ercise to besure, but one which allows for useful comparisons between e)uities, sectors, andindustries# 0sing our %aluation 6odel, we can currently assign a %1 valuation

calculation to more than :"" stocks in our 0S 0niverse#

Fe combine all of the e)uities with a valuation calculation to track marketvaluation figures and use them as a metric for making calls about the overall state of

the market# Two factors can lower these figures-- a market pullback, or a significantrise in 19S estimates# %ice-versa, a significant rally or reduction in 19S can raise thefigure# Fhenever we see overvaluation levels in e+cess of E ;A for the overall

universe andor :?A for the overvalued by :"A or more categories, we issue avaluation warning#

Fe now calculate that :#3A of stocks are overvalued and !3#;A of thosestocks are overvalued by :"A or more# These figures have been decreasing over thesummer as the market has been volatile and subGected to some battering from

events in the 1uro=one, reece, and--now--China# Fe have also seen a big hit for oilprices and .pple shares whose stock price can have a disproportionate effect on

key indices#'

The markets took a fairly large hit this week, with price declines for maGor indicesputting in their worst performance since :"!!# Still, even with the dip this week--E3#;

to ;A so far for the 7ow, S9;"", 2asda), and *ussell :""" as of this writing, stocks areonly down E;A average across those indices for the year# Fe have had such aboom market for so long that a week of bad news can have too much of an impact#

Heep in mind that we havenIt even hit the !"A level necessary to call this aJcorrectionJ yet#

Fe did our last valuation study on Kune :;th, and with many stocks putting insome of that JSell 4n 6ay and o .wayJ price action, valuation levels have declinedsignificantly from levels in e+cess of A or so on Kune :th to the current JnormalJ

range of E;"A# Fe have seen a decline to todayIs :A, and you would have to goall the way back to early Lebruary--with the SM9 ;"" trading at :":"-- to find stocksthat cheap#


7/11

.s always, the key part of the pu==le for 0S e)uity prices remains the Led and

how they will end the era of )uantitative easing# JSeptemberJ has been the responsefor )uite some time now, but events keep interfering with the best efforts of 0S centralbankers to get back to a JnormalJ interest rate environment#

ChinaIs long-demanded be careful what you wish forN' currency devaluation

and their market pull back has sent shock waves throughout the global financialsystem# This hurts stock prices in the 0S, but--parado+ically, it helps bolster than too asit becomes difficult to imagine the Led making any move higher rates in a period of

global uncertainty#

6eanwhile, the domestic economic picture remains solid# ood news on theemployment front, some indication of wage pressures, signs of a pop in housingD,

lower oil prices, and--now--the possibility of cheaper Chinese goods thanks to thecurrency devaluation#

That should go a long way in assuaging fears of inflation on the part of the Led--and again lowers the possibility of some rapid rate-rise in the Lall# .s long as they fulfill

their promise to pay attention to B5T( sides of their mandate--manage inflation .27

promote full employment, they should be able to keep their foot on the pedal for awhile longer#

.nd again, 0S e)uities remain standing as the last bastion of decent yield forscared investors the world over# .s we have been saying for a while now, we remainconfident that the underlying 0S economy is strong-- and getting stronger# (owever,

we live in an interconnected world and China has a cold# Therefore, we remainconvinced that the Led will raise rates later rather than sooner, and 0S stocks shouldbenefit from this environment as long as the crises in other areas donIt become

unmanageable#

0u*scr$*ers Bet -ULL ACC;00 to our arket and 0ector Overv$ews

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8/11

The chart below tracks the valuation metrics from Kanuary :"!;# 4t shows levels ine+cess of "A#

This chart shows overall universe over valuation in e+cess of "A vs the SM9 ;"" from

Kanuary :"!3

http://www.valuengine.com/images/newsletter/weekly/150818medtermval.pnghttp://www.valuengine.com/images/newsletter/weekly/150818shrtvalchrt.png


9/11

This chart shows overall universe under and over valuation in e+cess of "A vs the SM9;"" from 6arch :""?>

NOT;: T$me 0cale Compressed 1r$or to 2,&&

Re)ort ReVa-)

5ur individual company, industry, and sector reports offer individual investors

and professionals the information they need to make informed decisions about

investment prospects in an actionable format# They are obGective, timely, and--mostimportantly--available, for more than """ 0S and more than !:"" Canadian

companies# %alu1ngineIs *edesigned Stock *eports, you get our up-to-the minuteBuySell(old recommendations on over ;""" 0S and Canadian stocks, completevaluation and forecast data, company financials, and much, much more#

Fe have added new sections to the reports# These include consensus analystsestimates, historical rating-change data, and more# This info is presented along with

other critical company information so you can drill down into the companyIsfundamentals and cut through the hype to get a real picture of the profit potential--or lack thereof-- for the more than ;""" stock reports we publish and update EVERY

TRADING DAY!%alu1ngine Stock *eports give you access to the most critical %alu1ngine data

points--including valuation and forecast figures from our proprietary models# They

provide everything you need to make the %1 Stock 1valuation 6odels work for you,and they can substantially increase your chances of success in the 6arket#

http://www.valuengine.com/images/newsletter/weekly/150818lngvalchrt.png


10/11

"OW./OA" A !REE SAM*/E O! OR

.EW !ORMAT + C/ICKI. T(E

RE*ORT IMAE 3

ValuEngne Sgns .e# "str4uton "eal Wt&

Researc&*ool0H-based financial technology start-up *esearch9ool /imited has welcomed

0S-based stock valuation and forecasting service %alu1ngine to its innovative onlinefinancial research and market-commentary aggregation platform#

%alu1ngine brings coverage of more than ,3"" 0S stocks, including .7*s andforeign stocks that trade on 0S markets, to the platform# This e+tends the*esearch9ool coverage to the 0S-based 2


11/11

%alu1ngine C15 9aul (enneman stated that P*esearch9ool is an innovativeservice designed to provide )uick and easy access to market commentary# Fe view*esearch9ool as an important partner as we e+pand our report distribution to include

1uropean investors# Fe are e+cited to Goin with *esearch9ool as their platform reflects

our own commitment to provide timely, accurate, and obGective financial researchto investors across the globeQ#

ValuEnginecom is an independent research provider, producing 0uy2hold2sell recommendations, target price, and valuations on over 3,444 5S and 1anadian e6uities

every trading day

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ValuEngine Weekly: Construction Stocks,Chevron, Valuations, and More