You are on page 1of 10

July 8, 2011

If you no longer wish to receive this free newsletter, CLICK HERE to unsubscribe

The ValuEngine Weekly is an Investor Education newsletter focused on the quantitative approach to investing and the tools available from ValuEngine.com. 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, sign up now for a two-week free trial at www.valuengine.com!

MARKET OVERVIEW

Index
DJIA NASDAQ RUSSELL 2000 S&P 500

started week
12583 2817.87 840.13 1339.59

Thursday Close
12719.5 2872.66 858.11 1353.22

3 day change
136.5 54.79 17.98 13.63

3 day change %
1.08% 1.94% 2.14% 1.02%

ytd
9.86% 7.32% 8.14% 7.60%

Summary of VE Stock Universe


Stocks Undervalued Stocks Overvalued Stocks Undervalued by 20% Stocks Overvalued by 20% 45.92% 54.08% 19.06% 21.52%

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
0.97% 2.02% 1.33% 1.70% 1.28% 1.45% 1.48% 0.85% 1.12% 1.51% 0.65% 0.91% 0.98% 2.19% 0.97% 0.61%

MTD
0.78% 2.29% 2.82% 2.14% 1.68% 3.08% 1.64% 0.88% 1.21% 2.66% 1.58% 1.28% 1.49% 2.81% 2.85% 0.29%

YTD
16.51% -2.54% -2.98% 10.81% 9.99% -7.19% 5.74% -1.34% 4.57% 7.30% 16.02% 5.19% 1.53% 11.40% -2.91% 6.54%

Valuation
7.14% overvalued 4.78% overvalued 1.69% undervalued 7.19% overvalued 2.01% overvalued 2.24% overvalued 3.64% overvalued 7.31% overvalued 2.32% overvalued 1.94% overvalued 0.66% overvalued 10.07% overvalued 5.91% overvalued 4.26% overvalued 12.14% overvalued 8.91% overvalued

Last 12MReturn
39.98% 63.10% 62.60% 30.33% 41.91% 13.50% 38.28% 25.93% 18.36% 41.38% 33.25% 39.51% 50.92% 43.71% 27.96% 25.99%

P/E Ratio
22.55 25.35 30.46 25.21 44.05 40.33 35.55 28.59 27.37 30.38 33.16 26.45 57.89 31.88 30.57 28.99

Sector TalkTransportation Stocks


Below, we present the latest data on leading Transportation Sector stocks from our Institutional software package (VEI). These results were filtered by market price and volume--no results below 3$/share or less than 100k shares/day volume.

Top-Five Industrial Products Stocks--Short-Term Forecast Returns


Ticker
OCNFD OSG FRO DRYS GBX

Name
OCEANFREIGHT IN OVERSEAS SHIPHO FRONTLINE LTD DRYSHIPS INC GREENBRIER COS

Mkt Price
6.89 26.91 14.02 4.2 21.97

Valuation(%)
N/A -38.42 -42.65 -47.15 6.85

Last 12-M Retn(%)


-56.81 -23.85 -50.25 16.99 103.61

Top-Five Industrial Products Stocks--Long-Term Forecast Returns


Ticker
AMR CHRW UPS LFL EXPD

Name
AMR CORP CH ROBINSON WWD UTD PARCEL SRVC LAN CHILE-ADR EXPEDITORS INTL

Mkt Price
5.38 82.1 75.37 30.53 52.88

Valuation(%)
-47.44 8.3 -0.85 31.41 6.23

Last 12-M Retn(%)


-20.18 48.36 30.35 57.45 53.45

Top-Five Industrial Products Stocks--Composite Score


Ticker
FDX CSX RYAAY UNP NSC

Name
FEDEX CORP CSX CORP RYANAIR HLDGS UNION PAC CORP NORFOLK SOUTHRN

Mkt Price
98.5 27.01 28.93 106.25 76.99

Valuation(%)
-8.53 3.44 -16.09 7.92 2.7

Last 12-M Retn(%)


35.92 67.24 6.71 53.94 52.33

Top-Five Industrial Products Stocks--Most Overvalued


Ticker
RJET GLNG EXM GNK TK

Name
REPUBLIC AIRWAY GOLAR LNG LTD EXCEL MARITIME GENCO SHPG&TRDG TEEKAY CORP

Mkt Price
5.36 37.96 3.22 7.49 31.24

Valuation(%)
300 105.93 92.46 61.05 59.68

Last 12-M Retn(%)


3.08 288.93 -34.15 -51.89 24.46

Not a ValuEngine Premium Website member? Then please consider signing up for our no obligation, two-week free trial today. ValuEngine's award-winning stock Valuation and Forecast Models continue to provide investors with accurate, objective, and timely information on more than 5,700 US stocks, ADRs, and foreign equities that trade on US markets. Over the last few months, our stock picks have provided clients with many winners in both up and down periods Please Click Here to Sign Up for a FREE TRIAL of Our Award-Winning Stock Valuation and Forecast Service

Free Report Download for Subscribers


As a bonus to our Free Weekly Newsletter subscribers, we are now offering a FREE DOWNLOAD of one of our $ 25.00 Detailed Valuation Reports.
This week's free download is our report on Bunge Ltd. (BG). Bunge Ltd. is an integrated global agribusiness and food company spanning the farm-to-consumer food chain. Bunge processes, produces, moves, distributes and markets food on five continents.

Weekly Subscribers can download a FREE Detailed Valuation Report on BG HERE. If you have not subscribed and want to be able to receive a FREE $ 25.00 Detailed Valuation Report, you can subscribe to our Free Weekly Newsletter HERE.

Training Tip
Reading a VE Stock Analysis Page/Report
ValuEngine currently covers @5500 US equities as well as @500 ADRs and foreign stocks that trade on US markets. In addition, the firm covers most major Canadian stocks and can provide coverage of Tokyo markets on an as needed basis. Central to our research program are the two proprietary models our founders and research team developed via the deployment of 12 PhDs and a budget of several million dollars. The models are described briefly below: The Valuation Model This model calculates what a stock should trade at based on its fundamental economic data if the market were completely rational and efficient. Of course-despite the claims of many--the market is not rational nor is it necessarily efficient. If it were, there would never be a bubble or a panic-driven crash.

The Stock Valuation Model considers many time-sensitive variables--such as a stocks EPS growth, analyst estimates and consensus, and the interest rate environment. If any of the variables change, the model price changes immediately and the fair value is re-calculated. By operating in this manner, the model calculates fair value in near real time. The model calculates a fair valuation for the stock and its current measure of mispricing in percentage terms. This is displayed in the ValuEngine individual stock reports under the valuation summary snapshot and the assessment section. The Forecast Model The ValuEngine Forecast model analyzes stock prices from a different perspective. Unlike the Stock Valuation model--which merely states what a stocks price should be assuming a totally efficient market, the Stock Forecast Model predicts what a stocks price will be at a specified future time period given current market conditions. The Forecast Model builds upon the output of the Stock Valuation Model by combining it with econometric and simulation techniques to output target prices for one, three, and six-month and one, two, and three-year time horizons, as well as a percentage probability for gains and losses. The Stock Forecast Model uses a distinct forecasting model for the six forecast time horizons for every industry. It considers--among other things, short-term price reversals, intermediate-term momentum continuation, and long-term price reversals. As with the ValuEngine Stock Valuation Model, parameters are updated in real time. While the dynamic environment of the financial markets precludes forecasting with absolute certainty, the ValuEngine Forecast Models inclusion of micro/macro, short term/long term parameters and the use of probability statistics, results in forecasts that are robust and actionable. Remember that while it is impossible for anyone to predict the markets with absolute certainty, the forecast figures are especially useful for comparing tickers to each other in order to determine the best investment targets for a given timeframe. If you purchase a ValuEngine detailed valuation report or pull up a single stock valuation analysis from ValuEngine.com, you will find that there is a lot of information to digest. The model outputs will typically be listed on the first page of the report in the data summary or valuation snapshot.

In the example here for Apple (AAPL), The rating is "4-Engine" and thus the stock is considered to be a "Buy." AAPL's calculated fair value is $393.02 but the stock is trading at $326.75. This figure is a Valuation Model output. Thus, the stock is considered to be undervalued because the market is not pricing this company at a level which its underlying fundamentals would support--if the market were totally rational and efficient. The ValuEngine Forecast Model outputs are found in the forecast section of the reports. The one year forecast figure--also referred to as the "1-Yr Target Price," can be found in the Valuation snapshot section as well. The 1-Yr Target Price for AAPL is $346.13. So, the model "thinks" that the stock will increase in value by @6% over the course of a year. In the short-term, the stock is also predicted to increase in value by @2% for the 1, 3, and 6 month time horizons. The historical chart shows past ratings posted against the stock's performance.

The proprietary model data found on the first page of our reports is followed by additional pages of critical data which include: Business Summary, Optimal Buy-Sell Figures, Overall Rankings compared to the rest of our stock universe as well as the company's sector, industry group and similar companies, popular Alternate Valuation Figures such as PEG and comparables' PEG, and Detailed Financials (both Annual and Quarterly). Over time, ValuEngine ratings have been extensively tested and tracked. The results indicate that the ratings system is both symmetric and predictive. Portfolios constructed with just the "5-Engine" stocks have returned an average of 28% on an annual basis!

Suttmeier Says
--Commentary and Analysis from Chief Market Strategist Richard Suttmeier
If you have any comments or questions, send them to Rsuttmeier@Gmail.com Treasury Yields 10-Year--((3.153) The yield on the 10-Year US Treasury is back above its 50-day and 200-day simple moving averages at 3.088 and 3.142 with my quarterly risky level at 3.052. Todays value level is 3.345 with a weekly risky level at 2.957. Commodities and Forex Comex Gold--($1531.5) Gold remains above its 50-day simple moving average at $1520.4, so theres potential to weekly and monthly risky levels at $1537.2 and $1547.9. Daily and semiannual value levels are $1521.4 and $1469.9. We need a weekly close in July above $1547.9 to inflate the bubble further as semiannual and quarterly risky levels are $1644.8 and $1655.1. Nymex Crude--($98.58) The 200-day simple moving average is $93.49 with the 50-day at $99.47. Weekly and daily pivots are $96.28 and $99.74 and my annual pivots at $99.91 and $101.9. The Euro-- (1.4354) Monthly and quarterly value levels are 1.4133 and 1.3728 with a weekly pivot at 1.4326, the 50-day simple moving average at 1.4377, and daily and semiannual risky levels at 1.4613, 1.4752 and 1.4872. Major Indices The May 2nd highs are in sight led by a new all time high for Dow Transports at 5627.85. The May 2nd highs are 12,876 Dow Industrial Average, 1370.58 SPX, 2887.75 NASDAQ, 2417.83 NDX, 868.57 Russell 2000. This upside is not surprising based upon my proprietary analytics as I projected wider trading ranges in the second half of 2011. Technically, the upside is to my new monthly risky levels at 13,155 Dow Industrial Average, 1422.8 SPX, 2975 NASDAQ, 2483 NDX, 5736 Dow Transports, and 924.95 Russell 2000. I still say that we will see Dow 11.491 in the second half.

Fundamentally, stocks are overvalued but not yet near a ValuEngine Valuation Watch-- which we last issued near the May 2nd highs. Key Levels for the Major Equity Averages Dow --(12,719) The daily chart is overbought with the 50-day simple moving average at 12,381 and a daily risky level at 12,982. My weekly and annual value levels are 11,974 and 11,491.with monthly, quarterly and annual risky levels at 13,155, 13,839 and 13,890. S&P 500--(1353.2) The 50-day simple moving average is 1317.4 with a daily risky level at 1382.3. My weekly value level is 1280.4 with monthly and quarterly risky levels at 1422.8 and 1467.0. NASDAQ (2873) The 50-day simple moving average is 2764 with a daily risky level at 2937. My weekly value level is 2663 with monthly, quarterly and annual risky levels at 2975, 3109 and 3243. NASDAQ 100 (NDX) (2413) The 50-day SMA is 2320 with a daily risky level at 2471. My weekly value level is 2220 with monthly, annual and quarterly risky levels at 2483, 2590 and 2630. Dow Transports (5618) The 50-day SMA is 5348 with a daily risky level at 5724. My weekly and annual value levels are 5193 and 5179 with monthly, quarterly and annual risky levels at 5736, 6112 and 6131. Russell 2000 (858.11) The 50-day simple moving average is 821.41 with a daily risky level at 871.75. My weekly and annual value levels are 799.61 and 784.16 with monthly, quarterly and annual risky levels at 924.95, 930.83 and 978.58. The SOX (420.40) The 200-day is 414.70 with the 50-day at 424.33. My weekly value level is 388.97 with daily, monthly and quarterly risky levels at 428.16, 482.54 and 493.22. Note: For my technical momentum metrics--"MOJO"--I use whats called 12x3x3 slow stochastic readings from daily, weekly and monthly charts. The scale is zero to 10.0 where above 8.0 is overbought and below 2.0 is oversold.

ValuEngine.com Tools and Services


Click HERE to With Richard Suttmeier's ValuTrader Sign Up for Newsletter Portfolio, Richard you get timely stock Suttmeier's picks and a strategy ValuTrader designed to profit from Newsletter today's volatile market environment. Portfolio

With the ValuEngine Click HERE to Forecast 16 Market Neutral Strategy Sign Up for Portfolio Newsletter, ValuEngine's you can run your own Best portfolio like a hedge fund to manage risk and Performing profit in any market Newsletter environment.

If you are reading this you should sign up for ValuEngine's award- To Sign Up for winning stock valuation a FREE and forecast service at the low price of $19.95/ TRIAL, Please Click HERE month! NO OBLIGATION, Two Week FREE TRIAL!

We provide a variety of means for accessing ValuEngine market analysis and other content. You can find us on some of the leading financial media websites as well as the more popular social media services. While our own website ValuEngine.com provides access to lots of analysis--and you can always sign up to receive email daily and weekly bulletins HERE, some users prefer to download PDF reports of content while others prefer to garner info while browsing the web. Our Chief Market Strategist Richard Suttmeier is a prolific market observer and you can find his content in a variety of places. His weekly column on Forbes provides insights into his "Buy and Trade" strategy while his daily market analysis can be followed and accessed at Scribd, Twitter, and Minyanville. Senior Editor Steve Hach re-posts PDFs and web-accessible copies of Daily and Weekly ValuEngine bulletins at Seeking Alpha and Scribd. In most cases, you can receive notification of VE content posting by Suttmeier and Hach by following the ValuEngine feed on twitter @ValuEngine. Links for this content are provided below, you may also find these links on our website HERE Intelligent Investing with Richard Suttmeier Articles by Richard Suttmeier | Articles by Steve Hach Newsletters, Articles and Other Research Pieces Articles by Richard Suttmeier | Articles by Steve Hach Get short, timely messages from ValuEngine Inc Daily Bulletin PDFs, Weekly Newsletter PDFs, and PDF Research Reports

You might also like