The Dow Jones Industrial Average and S&P 500 edged higher Monday setting (again) all-time highs while the Nasdaq rose to its highest level of the year. Bank of America led the way in early trading after beating analyst estimates which helped investor confidence going into earnings season. But what can investors expect going into Tuesday?
Tuesday’s Margin of Safety
<img width="100%" src='http://res.cloudinary.com/finbox/image/upload/v1468930128/Margin_of_Safety_pz33bj.jpg' alt= ‘Margin of Safety Image’>Image courtesy of StockViews
Out of the 47 companies expected to report Tuesday, finbox.io data shows that 21 have a low uncertainty rating and only 4 of those 21 have a fair value estimate with a positive margin of safety. This may not come as a big surprise to many investors with the market at all-time highs.
<img width="100%" src='http://res.cloudinary.com/finbox/image/upload/v1468933346/4_Upside_Stocks-min_vm6dri.jpg' alt= ‘MSFT, HLX, UAL and PM Upside’>
Reading Between The Margin
With earnings season officially here, many top money managers have put up warning signs. Michael Lewitt at Money Morning also recently published an interesting piece on why the markets could get even scarier. Lewitt argues that the “massively overbought markets” may keep rising but recommends not chasing stock prices at current levels.
Finbox.io’s fundamental data appears to support this claim - at least for the companies reporting earnings Tuesday. Approximately 80% of these stocks have a negative margin of safety.
Get Started Now!
Uncertainty levels were recently added to fair value estimates. Click here to learn more. Note that fair value estimates are just a starting point for your research. Investors are always reminded that before making any investment, you should do your own proper due diligence on any name directly or indirectly mentioned in this article.
This article was written by Matt Hogan.