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July 29, 2016

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The ValuEngine Weekly is an Investor Education newsletter focused on the quantitative approach to
investing and the tools available from In today's fast-moving and globalized financial markets, it is easy to
get overloaded with information. The winners will adopt an objective, scientific, independent and
unemotional approach to investing. If you are not yet a member of ValuEngine's stock analysis service,
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VALUATION WATCH: Overvalued stocks now make up 45.37% of our


stocks assigned a valuation and 15.22% of those equities are calculated to
be overvalued by 20% or more. Six sectors are calculated to be
overvalued.
MARKET OVERVIEW
Index

Started week

Friday PM

Change

Change %

ytd

DJIA

18554.49

18372.1

-182.39

-0.98%

5.44%

NASDAQ

5096.99

5174.32

77.33

1.52%

3.33%

RUSSELL 2000

1212.84

1222.6

9.76

0.80%

7.63%

S&P 500

2173.71

2176.24

2.53

0.12%

6.47%

Summary of VE Stock Universe


Stocks Undervalued

54.63%

Stocks Overvalued

45.37%

Stocks Undervalued by 20%

23.58%

Stocks Overvalued by 20%

15.22%

SECTOR OVERVIEW
Sector

Change

MTD

YTD

Valuation

Last 12-M
Return

P/E
Ratio

Aerospace

-0.24%

3.68%

-2.40%

0.59% overvalued

-3.33%

19.41

Auto-Tires-Trucks

-0.86%

6.69%

1.08%

15.16% undervalued

-5.78%

12.68

Basic Materials

-0.08%

8.22%

51.32%

16.38% overvalued

58.15%

30.24

Business Services

-0.32%

3.66%

14.42%

0.29% undervalued

-2.94%

23.56

Computer and Technology

-0.24%

5.25%

11.40%

0.63% undervalued

1.86%

30.21

Construction

0.46%

7.90%

29.17%

0.13% undervalued

8.95%

22.18

Consumer Discretionary

0.04%

4.50%

6.66%

2.76% undervalued

-3.55%

22.4

Consumer Staples

-0.06%

1.87%

9.40%

6.48% overvalued

8.42%

24.26

Finance

-0.01%

3.80%

5.11%

1.96% undervalued

0.11%

16.45

Industrial Products

-0.74%

5.36%

10.91%

1.44% overvalued

4.58%

22.65

Medical

-0.04%

6.19%

1.11%

8.37% undervalued

-19.88%

28.29

Multi-Sector Conglomerates

0.20%

3.10%

7.16%

3.65% overvalued

2.21%

18.8

Oils-Energy

-0.31%

-1.52%

13.78%

5.54% undervalued

-15.81%

23.84

Retail-Wholesale

0.04%

3.65%

0.42%

8.74% undervalued

-5.89%

22.3

Transportation

0.10%

6.59%

7.45%

9.13% undervalued

-21.30%

14.33

Utilities

-0.40%

1.90%

12.92%

5.79% overvalued

10.78%

23.39

Sector TalkBasic Materials


Below, we present the latest data on leading Basic Materials Sector stocks from
our Professional Stock Analysis Service. We applied some basic liquidity criteria-share price greater than $3 and average daily volume in excess of 100k shares. We
have been following the sector closely of late because it has been correlated so
tightly to overall equity price moves.

Top-Five Basic Materials Sector Stocks--Short-Term Forecast Returns


Ticker

Company Name

Market Price

Valuation

Last 12-M Retrn

TSE

TRINSEO SA

49.45

N/A

100.77%

CZZ

COSAN LTD-A

6.44

N/A

39.70%

AKS

AK STEEL HLDG

6.5

-7.28%

124.14%

KRA

KRATON PERFORM

27.76

5.92%

27.46%

RYAM

RAYONIER ADV MT

13.97

N/A

16.42%

Top-Five Basic Materials Sector Stocks--Long-Term Forecast Returns


Ticker

Company Name

Market Price

Valuation

Last 12-M Retrn

TSE

TRINSEO SA

49.45

N/A

100.77%

CZZ

COSAN LTD-A

6.44

N/A

39.70%

AKS

AK STEEL HLDG

6.5

-7.28%

124.14%

KRA

KRATON PERFORM

27.76

5.92%

27.46%

RYAM

RAYONIER ADV MT

13.97

N/A

16.42%

Top-Five Basic Materials Sector Stocks--Composite Score


Ticker

Company Name

Market Price

Valuation

Last 12-M Retrn

CE

CELANESE CP-A

66.18

-11.44%

3.20%

STLD

STEEL DYNAMICS

26.77

-15.60%

33.45%

TRQ

TURQUOISE HILL

3.54

-45.07%

3.21%

DOW

DOW CHEMICAL

53.67

-0.75%

15.05%

AKS

AK STEEL HLDG

6.5

-7.28%

124.14%

Top-Five Basic Materials Sector Stocks--Most Overvalued


Ticker

Company Name

Market Price

Valuation

Last 12-M Retrn

IAG

IAMGOLD CORP

5.01

300.00%

257.86%

HCLP

HI-CRUSH PTNRS

11.42

246.29%

-36.63%

AG

FIRST MAJESTIC

16.54

163.49%

418.50%

BVN

BUENAVENTUR-ADR

14.15

136.54%

86.68%

RIC

RICHMONT MINES

10.45

130.22%

300.38%

Find out what Wall Street Investment and Media Professionals already know,
ValuEngine offers sophisticated stock valuation and forecast research as well as a
variety of portfolio screening and creation tools.

What's Hot
ValuEngine View Portfolio Rides Brexit
Bounce To 8% Gain
For June/July, we had a great month as the markets shook off the Brexit
fallout and powered up once again. Our long-only ValueEngine View portfolio
matched the upswing perfectly with a big gain of 8.82%. We beat the benchmark
S&P 500's similar gain of 8.39% by 43 bps. The trailing 12 month gain of the VE View is
-5.23% versus the S&P 500 gain of 2.9%. The return since inception of the View is
108.25% versus the S&P's gain of 91.48%.
We had a perfect 100% hit ratio this month with 15/15 winning positions. Seven
of our picks provided double-digit returns with Thor Industries leading the way with a
great 22% pick up. Other double-digit returns came from Cooper-Standard, AMN
Health Care, Employers Holdings, Smith and Wesson, and Windstream. The big gains
meant that none of our picks hit stop-losses levels set at 10%. We will retain those stops
at the 10% level moving forward.
Currently, the Valuation Model finds that 45.37% of the equities to which we
can assign a valuation are overvalued--with 15.22% coming in overvalued at 20% or
more. Seven sectors are calculated to be overvalued. Our valuation figures still show
a "normal" market, with valuations nowhere near that bargain level they presented in
the immediate aftermath of the Brexit vote.
The markets in the US and elsewhere certainly shook off that Brexit panic, with
several indices setting new records over the past few weeks. Many analysts found
that the uncertainty in the EU removed any possible scenario where the Fed would
raise rates any time soon. Of course, that is not to say that some Fed officials don't
favor increases, but the time to hit the brakes may have passed by given the fact
that the US is in the midst of a presidential election, and the central bank is notoriously
skittish about any hint of political bias.
Once again, after this week's meetings, the Fed has stood pat. But, if good
data for the US and world economy holds up, the Fed may push for an increase in
September. Again, we find that the labor market should still be given some room to
run. As always, and as we repeat like a mantra, the balancing act between the dual
mandate of control inflation and foster full employment creates tension.

In our July portfolio, we turnover just four positions. On a sector basis the model
likes Consumer Discretionary stocks and Tech stocks, We add one selection from our
Valuation model's aggressive-growth strategy, one position from our Forecast model's
diversified-growth strategy, and two positions favored by both.
Below are the latest results from our VE View Strategy Newsletter:
Company Name

Entry Price
6/28/16

AHS

AMN HLTHCR SVCS

37.73

43.84

6.11

16.19

CPS

COOPER-STANDARD

74.61

89.73

15.12

20.27

EIG

EMPLOYERS HLDGS

27.14

31.39

4.25

15.66

HII

HUNTINGTON INGL

159.1

168.51

9.41

5.91

Ticker

Exit Price
Change
7/26/16

%Change

HRL

HORMEL FOODS CP

35.66798

36.81

1.14

3.20

KORS

MICHAEL KORS

46.19

51.68

5.49

11.89

LNT

ALLIANT ENGY CP

39.85

40.4

0.55

1.38

LUV

SOUTHWEST AIR

36.76

37.36

0.60

1.63

RAI

REYNOLDS AMER

52.01

52.31

0.30

0.58

RTN

RAYTHEON CO

134.0732

135.56

1.49

1.11

SWHC

SMITH & WESSON

25.61

29.37

3.76

14.68

AT&T INC

41.56462

42.94

1.38

3.31

THO

THOR INDS INC

60.66

74.03

13.37

22.04

VZ

VERIZON COMM

54.19289

55.87

1.68

3.09

WINDSTREAM HLDG

8.29

9.23

0.94

11.34

WIN

LONG PORTFOLIO
GSPC

S&P500

8.82
2000.54

2168.48

167.94

8.39

Free Download for Readers


As a bonus to our Free Weekly Newsletter subscribers,
we are offering a FREE DOWNLOAD of one of our Stock Reports
United Parcel Service, Inc. (UPS) is the world's largest express carrier, the world's largest
package delivery company and a leading global provider of specialized
transportation and logistics services. Their primary business is the time-definite delivery
of packages and documents throughout the United States and in over 200 other
countries and territories. They have established a vast and reliable global
transportation infrastructure, developed a comprehensive, competitive and
guaranteed portfolio of services and consistently supported these services with
advanced technology.

VALUENGINE RECOMMENDATION: ValuEngine continues its BUY recommendation on


United Parcel Service for 2016-07-28. Based on the information we have gathered
and our resulting research, we feel that United Parcel Service has the probability to
OUTPERFORM average market performance for the next year. The company exhibits
ATTRACTIVE Company Size and Sharpe Ratio.
Read our Complete Detailed Valuation Report on United Parcel Service HERE.

ValuEngine Forecast
Target
Price*

Expected
Return

1-Month

109.16

0.39%

3-Month

109.67

0.86%

6-Month

110.23

1.38%

1-Year

113.84

4.70%

2-Year

110.28

1.43%

3-Year

106.83

-1.75%

Valuation & Rankings


Valuation

5.40% undervalued

Valuation Rank(?)

1-M Forecast Return

0.39%

1-M Forecast Return Rank

12-M Return

8.80%

Momentum Rank(?)

Sharpe Ratio

0.51

Sharpe Ratio Rank(?)

5-Y Avg Annual Return

7.80%

5-Y Avg Annual Rtn Rank

Volatility

15.41%

Volatility Rank(?)

Expected EPS Growth

6.18%

EPS Growth Rank(?)

Market Cap (billions)

98.40

Size Rank

Trailing P/E Ratio

19.21

Trailing P/E Rank(?)

Forward P/E Ratio

18.09

Forward P/E Ratio Rank

PEG Ratio

3.11

PEG Ratio Rank

Price/Sales

1.67

Price/Sales Rank(?)

Market/Book

39.68

Market/Book Rank(?)

Beta

0.91

Beta Rank

Alpha

0.09

Alpha Rank

56
79
70
85
76
84
34
100
64
41
14
51
4
49
77

ValuEngine Capital Money Management Services


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The ValuEngine View Strategy is constructed by integrating this model along
with some basic rules for market capitalization and industry diversification.
The portfolio has 15 stocks and is rebalanced once each month.
Automatically Trade Our Portfolio Strategies ValuEngine Market Neutral
Strategy: The ValuEngine Market Neutral Strategy is the product of
ValuEngine's Forecast Model. This model was developed by a team of PhD's
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Strategies To Suit All Investor Types


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invests in a variety of asset classes in order to provide investors with stable
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Please contact us if you would like to put the power of ValuEngine to work
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For more information, please contact us by email at
info@ValuEngineCapital.com or by phone at (407) 308-5686.
ValuEngine.com is an independent research provider, producing
buy/hold/sell recommendations, target price, and valuations on over 7,000
US and Canadian equities every trading day.
Visit www.ValuEngine.com for more information and a free trial.

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