August 30, 2011

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Yaron Sadan of the "Hard Trade" Warns Investors to Avoid Bank of America (BAC,$BAC)
Yaron Sadan of the "Hard Trade" Warns Investors to Avoid Bank of America (BAC,$BAC)
ValuEngine is pleased to announce another addition to our stable of high quality investment newsletters. Our latest premium newsletter comes to us from Yaron Sadan and is called "The Hard Trade." Sadan is the founder and president of Osher Capital Advisors, LLC (Osher). Before starting Osher, Sadan worked in the private wealth management group of Goldman Sachs.

Bank of America Corporation (BAC,$BAC), a financial holding company, provides banking and nonbanking financial services and products to individuals, small- and middle-market businesses, large corporations, and governments in the United States and internationally. One opportunity that Im not stepping in front of, but that I cant look away from: Bank of America. Why would anyone take the liquidity risk and/or credit risk of BAC here? The only answer is that there is an implied belief that BAC is too-big-to-fail (as are C, JPM, GS, and a handful of others).

Im going to contradict that theory. Obama & Co. will need to make an example out of the next big bank to fail in order to prove that they are not socialists going into the 2012 elections. In essence, someone is going to get sacrificed and I think it will be BAC or C (JPM really is too big to sacrifice due to its swap and CDS positions). Regardless, until the banks can find a footing, I dont believe any market rally can hold. ValuEngine has issued a SELL recommendation for BANK OF AMER CP on Aug. 30, 2011. Based on the information we have gathered and our resulting research, we feel that BANK OF AMER CP has the probability to UNDERPERFORM average market performance for the next year. The company exhibits UNATTRACTIVE momentum, 5year annualized return and risk. Based on available data as of Aug. 30, 2011, we believe that BAC should be trading at $11.78. This makes BAC 28.80% undervalued. Fair Value indicates what we believe the stock should be trading at today if the stock market were perfectly efficient and everything traded at its true worth. For BAC, we base this on actual earnings per share (EPS) for the previous four quarters of -$0.43, forecasted EPS for the next four quarters of $1.25, and correlations to the 30- year Treasury bond yield of 3.62%.

Valuation & Rankings

Valuation 1-M Forecast Return 12-M Return Sharpe Ratio 5-Y Avg Annual Return Volatility Expected EPS Growth Market Cap (billions) Trailing P/E Ratio Forward P/E Ratio PEG Ratio Price/Sales Market/Book Beta Alpha 28.80% undervalued 0.78% -33.41% -0.56 -36.28% 65.28% 390.80% 85.02 n/a 6.69 n/a 0.82 0.66 2.21 -0.64 Valuation Rank 1-M Forecast Return Rank Momentum Rank Sharpe Ratio Rank 5-Y Avg Annual Rtn Rank Volatility Rank EPS Growth Rank Size Rank Trailing P/E Rank Forward P/E Ratio Rank PEG Ratio Rank Price/Sales Rank Market/Book Rank Beta Rank Alpha Rank 11 10 n/a 65 86 20 88 8 14 16 15 32 96 100 68

The Hard Trade Premium Newsletter is now available on our website HERE

MARKET OVERVIEW
Summary of VE Stock Universe
Stocks Undervalued Stocks Overvalued Stocks Undervalued by 20% Stocks Overvalued by 20% 79.86% 20.14% 47.51% 6.48%

SECTOR OVERVIEW
Sector
Aerospace Auto-Tires-Trucks Basic Materials Business Services Computer and Technology Construction Consumer Discretionary Consumer Staples Finance Industrial Products Medical Multi-Sector Conglomerates Oils-Energy Retail-Wholesale Transportation Utilities

Change
2.97% 4.87% 3.00% 2.86% 3.49% 4.05% 3.70% 3.72% 3.29% 3.73% 3.10% 2.92% 3.61% 3.71% 3.66% 2.42%

MTD
-8.80% -15.82% -8.62% -9.75% -10.87% -12.56% -9.67% -7.24% -7.70% -9.79% -8.51% -10.23% -13.82% -8.16% -9.97% -3.20%

YTD
4.98% -26.32% -13.63% -7.10% -8.80% -23.03% -9.24% -11.75% -7.26% -10.38% -2.03% -12.15% -14.63% -1.61% -13.54% -0.94%

Valuation
16.49% undervalued 25.46% undervalued 17.55% undervalued 16.64% undervalued 20.86% undervalued 21.03% undervalued 20.33% undervalued 11.43% undervalued 16.74% undervalued 20.67% undervalued 20.45% undervalued 16.37% undervalued 16.75% undervalued 15.03% undervalued 10.28% undervalued 3.31% undervalued

Last 12MReturn
13.20% 17.17% 34.40% 15.00% 17.56% -4.05% 16.09% 10.58% 5.67% 19.10% 11.39% 16.94% 29.22% 24.10% 2.89% 14.16%

P/E Ratio
20.15 15.55 25.14 22.57 38.44 41.31 31.64 17.71 23.87 19.36 29.15 22.24 47.05 23.85 17.49 25.88