Sell Alert
Universal Electronics (UEIC)
from Upside, recommended at $26 in the May 17, 2013, Daily Alert and Investment Digest issue 743.
Universal Electronics is being downgraded to Sell because of deteriorating Quadrix scores and a stretched valuation. The maker of remote-control products earns an Overall score of 70, down from 92 in May. The Quality score is 57, while the Value score has slumped to 45. At 21 times trailing earnings, shares trade at a 21% premium to their five-year average P/E and above the industry average of 19. Universal’s price action is impressive, with the shares nearly at all-time highs. But the stock is not one we would recommend today. Universal, first initiated as a Buy at $23.25 in March and upgraded to Best Buy at $26.14 in May, should be sold.
Richard J. Moroney, CFA, Upside, www.upsidestocks.com, 800-233-5922, October 7, 2013