Actionable news
All posts from Actionable news

6 Well-Known Stocks With Superb Charts but Sky-High Valuations

The bull market has now reached the ripe age of seven and a half years old. Stocks are valued high, at more than 18 times forward 12-month earnings for the S&P 500, and it is an election year with slow global growth. The Federal Reserve even keeps saying that it wants to raise interest rates. That may sound like a time that investors would show some pause or concern, but those same investors keep proving over and over that they want to buy stocks.

24/7 Wall St. has seen many warnings that the market seems to be overlooking, but pure technicians and chartists do not look at the same thing that fundamental investors care about. Some stocks have continued to surge day in and day out, and now their charts have been so strong that they might garner attention for a closer look.

Does it matter that these stocks are all valued with what might be nose-bleed valuations? Does it matter that these are almost all trading above the consensus analyst price targets from Thomson Reuters? Does it matter that some are currently losing money from operations? Again, fundamentals generally do not matter much (or at all) to pure technicians. P/E ratios, EBITDA growth, debt-to-equity, dividend coverage and other ratios that traditional investors are largely ignored by technicians.

24/7 Wall St. has tracked six key stocks that are all well-known companies and which have just managed to defy gravity. Not all of them are at all-time highs, but they have all seen more than impressive gains.

As a reminder, for a stock to be strong it means that many of the percentage gains have already been seen. That might not continue, and the fundamentals might scare traditional investors. Technicians only follow trends until those trends no longer work, and then they rapidly move on to something else. Another issue to consider is that by the time many charts get written about, the moves may be closer to an end rather than the start of something new.

Avon Products

Avon Products Inc. (NYSE: AVP) was so down and out that many investors forgot about it (or wish they did). That was then, with shares having recovered a whopping 170% from their lows of the last year. After a private equity deal there are hopes that this turnaround will finally have the runway and focus it needs. The issue is that selling its North American operations to Cerberus alleviated the cash worries, and Avon even recently had a $500...