June 23, 2016

VALUATION WATCH: Overvalued stocks now make up 43.24% of our stocks assigned a valuation and 14.84% of those equities are calculated to be overvalued by 20% or more. Six sectors are calculated to be overvalued.

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LUV Rules (Still)

--ValuEngine: Southwest Airlines Remains Top S&P500 Stock

ValuEngine tracks more than 7000 US equities, ADRs, and foreign stock which trade on US exchanges as well as @1000 Canadian equities.  When EPS estimates are available for a given equity, our model calculates a level of mispricing or valuation percentage for that equity based on earnings estimates and what the stock should be worth if the market were totally rational and efficient--an academic exercise to be sure, but one which allows for useful comparisons between equities, sectors, and industries. Using our Valuation Model, we can currently assign a VE valuation calculation to more than 2800 stocks in our US Universe.

We also use trading data to provide forecast estimates for a variety of time horizons for almost ever equity in our database. Our Buy/Sell/Hold recommendations are based upon the 1-year forecast return figure. Using valuation and forecast figures, you can rank and rate our covered stocks against each other, to find out, in an objective and systematic way, the most attractive investment targets based on your own risk/reward parameters. We re-calculate the entire database every trading day, so you are assured that every proprietary valuation and forecast datapoint is as up-to-date as possible.

We can use our data to track individual stocks, industries, sectors, and indices. For today's bulletin, we present key metrics for the top picks in the S&P 500. The companies listed below represent the top-ten BUY/STRONG BUY stocks within the index. They are presented below according to their one-month forecast target prices.

The last time we looked at the S&P 500 was June 2nd. Since then, we have had a 40% turnover in our list. Traveler's has declined yet again as newcomer Michael Kors (KORS) debuts in the number two position. Chubb Limited (CB) has moved up one spot. Tyson (TSN), DR Horton (DHI), and Global Payments (GPN) have also declined. Other newcomers also include KLA-Tencor (KLAC), Aflac (AFL), and Verizon (VZ). Southwest Airlines (LUV) retains its number one spot.

NOTE: New stocks are in BOLD, old stocks that have moved up the list are in GREEN, old stocks that have declined in position are in RED, and stocks which have retained their position are in CAPS.

Below is today's data on our SP500 leader, Southwest Airlines (LUV):

Southwest Airlines is a major domestic airline that provides primarily shorthaul, high-frequency, point-to-point, low-fare service. Southwest operates over Boeing 737 aircraft in numerous cities. Southwest has the lowest operating cost structure in the domestic airline industry and consistently offers the lowest and simplest fares. Southwest also has one of the best overall Customer Service records.

VALUENGINE RECOMMENDATION: ValuEngine continues its STRONG BUY recommendation on SOUTHWEST AIR for 2016-06-22. Based on the information we have gathered and our resulting research, we feel that SOUTHWEST AIR has the probability to OUTPERFORM average market performance for the next year. The company exhibits ATTRACTIVE Company Size and Sharpe Ratio.

You can download a free copy of detailed report on LUV from the link below.

ValuEngine Forecast
	Target Price*	Expected Return
1-Month	40.81	1.37%
3-Month	41.12	2.13%
6-Month	40.90	1.58%
1-Year	46.90	16.50%
2-Year	38.54	-4.27%
3-Year	29.02	-27.93%

Valuation & Rankings
Valuation	18.08% undervalued	Valuation Rank(?)	73
1-M Forecast Return	1.37%	1-M Forecast Return Rank	100
12-M Return	15.72%	Momentum Rank(?)	84
Sharpe Ratio	0.92	Sharpe Ratio Rank(?)	96
5-Y Avg Annual Return	25.57%	5-Y Avg Annual Rtn Rank	96
Volatility	27.81%	Volatility Rank(?)	62
Expected EPS Growth	8.23%	EPS Growth Rank(?)	39
Market Cap (billions)	27.33	Size Rank	96
Trailing P/E Ratio	10.35	Trailing P/E Rank(?)	89
Forward P/E Ratio	9.56	Forward P/E Ratio Rank	83
PEG Ratio	1.26	PEG Ratio Rank	36
Price/Sales	1.35	Price/Sales Rank(?)	56
Market/Book	4.19	Market/Book Rank(?)	28
Beta	1.02	Beta Rank	44
Alpha	0.14	Alpha Rank	83

DOWNLOAD A FREE SAMPLE OF OUR SOUTHWEST (LUV) REPORT BY CLICKING HERE

ValuEngine Market Overview

ValuEngine Sector Overview