Value Line Low Total Return Screen (3/29/2013)


Companies of Interest

Whoa. We’ve not seen a listing for “Materially Stronger” like that in quite a while!

But keep it in context. Despite significant strengthening of fundamentals, virtually none of these show up on the study target list. And in fact, we had to stretch the parameters in order to have a list.

We made an exception for Blyth (BTH) because usually a quality ranking of 14 would normally keep it off the list. But the return is speculative and if you can build a case for a turnaround, BTH could be worth a closer look.  BTH is clearly a restructuring-in-progress.

Fluor Corp (FLR), a Beardstown Ladies favorite, is here as a reminder. Some of you may recall that the Ladies continued to hold FLR despite a low single-digit PAR a few years ago (something we explored during a Dashboard Diagnostics webcast). The reminder is that stocks can stay overbought for a long time — but that vigilance, and in some cases, protective measures can be prudent.

Colgate-Palmolive (CL) is on the list because 10.2% is a pretty solid return forecast when the average return forecast is only 6.8% and the excellent quality rating stands out here. (Plus, it’s my Dad’s favorite stock)

Sonoco Products isn’t about gasoline and it’s a good study although probably worth waiting for a stock price dip before getting wrapped up in it.

Materially Stronger: Lumber Liquidators (LL), Masco (MAS), Simpson Mfg (SSD), Universal Forest Products (UFPI), Eagle Materials (EXP), Martin Marietta (MLM), Texas Industries (TXI), Mastec (MTZ), HNI (HNI), Tempur-Pedic (TPX), KB Homes (KBH), Lennar (LEN), Pulte Homes (PHM), Ryland Group (RYL), Fastenal (FAST), International Paper (IP), Headwaters (HW), NRG Energy (NRG), Potlatch (PCH), Lowe’s (LOW), Tractor Supply (TSCO)

Materially Weaker: Foster Wheeler (FWLT), St. Joe (JOE), GT Advanced Tech (GTAT), AES (AES)

Market Barometers

The median Value Line low total return forecast is 6.8% vs. 6.8% last week.

As the first quarter of 2013 comes to a close, it’s probably time to check in on our run-for-the-hills indicator, the track record for new highs vs. new lows.

Despite the generally bullish and potentially overbought general market, there’s no reason to load up the family truck and head for the hills, Beverly or otherwise, Jed.

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