U.S. equity markets look to continue Friday’s rally despite higher oil prices and relatively rich market valuations. At current levels, the market is trading at a Shiller P/E of 22.7 versus a historical mean of 16.5 with earnings season continue throughout the week and M&A activity picking up in the last month.

Earnings

Shares of home improvement retailer Lowes (LOW) are mixed after its latest quarterly results beat analyst expectations. Lowe's reported fourth quarter profit of $0.26 versus analysts expectations of $0.23. Its results were helped by rebuilding after Hurricane Sandy and ongoing efforts to improve product selection and customer service. It now expects EPS of $2.05 for the current fiscal year on revenue of $50.52 billion.

At current levels, Lowe's trades at an 18 multiple and may be the reason some Gurus have been selling out or reducing their positions. Gurus who have recently reduced their position in the home improvement retailer include:

• Lou Simpson
• John Hussman
• Robert Olstein
• David Dreman

Lowe’s main rival, the Home Depot (HD), is expected to report results tomorrow.

Shares of car rental company Hertz (HTZ) are up more than 8% after it reported quarterly results following its acquisition of Dollar Thrifty. Excluding items, Hertz earned $0.33 per share in the quarter but also had a bullish forecast. The company now forecasts adjusted earnings between $1.82 to $1.92 on revenue of $10.85 to 10.95 billion. Analysts were expecting adjusted EPS of $1.78 on revenue of $10.79

Not much activity from Gurus in the car rental company with PRIMECAP Management being the sole buyer lately, but the impact of the purchase is insignificant.

Finally, keep an eye on shares of J.C. Penney (JCP) leading up to Wednesday when it reports fourth quarter results. I know its turnaround is suppose to take years and early figures indicate the shops are working. But the WSJ is reporting more board dissatisfaction with Vornado’s Steven Roth expressing disappointment in sales figures as his investment continues to be a big loser. If sales figures continue to disappoint, the pressure might start to build on CEO Ron Johnson. The market is pricing in a great sales figure as JCP’s shares are up 17% in the past month.

Gurus who have recently bought or added to J.C. Penney include:

• Whitney Tilson
• Hotchkis & Wiley
• Richard Pzena
• Dodge & Cox
• Ruane Cunniff

Disclosure: None

Track Gurus’ Stock Purchases Daily – Real Time Guru Picks

GuruFocus "Real Time Picks" reports the stock purchases and sales that Gurus have made within the prior 2 weeks. The report time lag can be as short as 3 days after the date of the transaction. This is just one of the features provided with GuruFocus Premium Membership.

Click Here to Try It Free!

More Gurufocus Links

Latest Guru Picks	Value Strategies
Warren Buffett Portfolio	Ben Graham Net-Net
Real Time Picks	Buffett-Munger Screener
Aggregated Portfolio	Undervalued Predictable
ETFs, Options	Low P/S Companies
Insider Trends	10-Year Financials
52-Week Lows	Interactive Charts
Model Portfolios	DCF Calculator
RSS Feed	Monthly Newsletters
The All-In-One Screener	Portfolio Tracking Tool