September 9, 2011

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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
11237.23 2417.61 671.92 1173.97

Thursday Close
11295.8 2529.14 694.92 1185.9

4 day change
58.57 111.53 23 11.93

4 day change %
0.52% 4.61% 3.42% 1.02%

ytd
-4.79% -6.47% -13.94% -7.79%

Summary of VE Stock Universe

Stocks Undervalued Stocks Overvalued Stocks Undervalued by 20% Stocks Overvalued by 20% 84.83% 15.17% 53.37% 4.90%

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
-1.94% -1.78% -0.96% -1.75% -1.30% -1.86% -1.46% -1.14% -1.77% -1.63% -1.63% -1.29% -1.27% -1.83% -1.76% -0.87%

MTD
-4.40% -3.01% -0.90% -2.79% -2.16% -2.40% -2.00% -1.70% -2.21% -2.68% -1.68% -2.09% -2.71% -1.54% -3.61% -1.55%

YTD
2.00% -29.71% -13.72% -9.64% -10.62% -25.12% -11.85% -14.08% -10.89% -13.72% -4.54% -14.24% -16.23% -3.56% -16.69% -3.20%

Valuation
20.38% undervalued 25.41% undervalued 17.28% undervalued 21.04% undervalued 22.63% undervalued 27.56% undervalued 20.05% undervalued 15.33% undervalued 20.53% undervalued 21.89% undervalued 23.88% undervalued 18.17% undervalued 19.36% undervalued 18.19% undervalued 19.64% undervalued 6.38% undervalued

Last 12MReturn
6.85% 13.37% 29.57% 7.17% 11.70% -7.93% 10.53% 6.34% 0.97% 13.34% 10.57% 9.54% 27.96% 18.39% -2.61% 10.53%

P/E Ratio
16.51 17 31.14 38.31 32.11 35.4 24.7 15.93 23.53 22.97 24.74 21.25 36.63 24.22 21.29 24.72

Index Talk--The Dow

Below, we present the latest VE data on Dow Jones Industrial Average stocks from our Institutional software package (VEI).

The Dow Components

Ticker
AA AXP BA BAC CAT CSCO CVX DD DIS GE

Name
ALCOA INC AMER EXPRESS CO BOEING CO BANK OF AMER CP CATERPILLAR INC CISCO SYSTEMS CHEVRON CORP DU PONT (EI) DE DISNEY WALT GENL ELECTRIC

Mkt Price
12.03 49.53 62.81 7.2 87.04 16.29 98.41 46.4 31.95 15.59

Valuation VE (%) Rating

-40.85 -17.53 -10.44 -41.23 -22.17 -34.9 -7.7 -27.34 -19.3 -37.43 3 3 3 2 3 4 4 4 3 3

Last 12- Forecast M 1-Month Retn(%) Retn(%)

9.56 25.65 -0.27 -45.95 25.35 -20.5 31.49 13.12 -4.54 2.36 2.86 1.6 1.59 -0.37 1.61 1.84 2.08 2.87 1.87 0.62

Forecast 1-Yr Retn(%)

2.2 2.86 3.99 -8.8 -0.48 6.48 8.56 5.67 1.71 0.22

P/E Ratio
11.56 12.63 14.99 N/A 13.27 11.72 7.96 11.88 12.86 11.91

Ticker

Name

Mkt Price
32.46 23.87 165.25 19.9 64.95 33.51 35.06 71.17 88.61 79.26 32.78 26.22 18.82 62.91 27.96 49.34 72.63 35.38 52.21 72.82

Valuation VE Last 12- Forecast (%) Rating M 1-Month Retn(%) Retn(%)

-17.96 -48.5 -2.81 -24.49 -3.6 -33.82 0.33 0.87 5.62 -19.97 -19.19 -10.13 -10.4 -6.59 -15.51 -13.6 -17.31 -17.47 -9.86 -19.99 4 4 3 3 3 2 3 4 4 4 4 3 3 3 3 3 3 3 4 4 13.5 -37.92 33.34 14.93 14.31 -13.14 18.85 26.68 20.04 -1.81 -4.42 12.34 18.44 7.54 8.04 0.9 8.53 22.55 3.43 22.76 2.18 2.28 1.67 1.76 1.92 1.47 1.74 2.04 2.09 2.3 2.28 1.56 2.13 1.68 1.67 1.29 2.19 1.28 2.11 2.25

Forecast 1-Yr Retn(%)

7.06 7.11 4.39 4.89 4.96 -5.25 1.89 6.07 7.02 5.46 5.62 4.82 4.74 0.69 4.08 -2.48 4.62 2.19 7.32 11

P/E Ratio
14.4 4.81 13.05 8.56 13.31 6.96 16.5 19.01 17.55 13.32 9.02 9.8 8.49 15.9 12.12 11.26 13.58 16.11 12.05 9.02

HD HPQ IBM INTC JNJ JPM KFT KO MCD MMM MRK MSFT PFE PG T TRV UTX VZ WMT XOM

HOME DEPOT HEWLETT PACKARD INTL BUS MACH INTEL CORP JOHNSON & JOHNS JPMORGAN CHASE KRAFT FOODS INC COCA COLA CO MCDONALDS CORP 3M CO MERCK & CO INC MICROSOFT CORP PFIZER INC PROCTER & GAMBL AT&T INC TRAVELERS COS UTD TECHS CORP VERIZON COMM WAL-MART STORES EXXON MOBIL CRP

ValuEngine Ratings cover approximately 6,000 stocks. ValuEngine's stock recommendations are based on the proprietary ValuEngine Forecast Model calculations for each individual equity. A stock is rated Strong Buy, Buy, Hold, Sell, Strong Sell based on the One Year Forecast Return (1YFR). The breakdown for each rating is as follows: Strong Buy: More than +12% 1YFR, Buy: Between +5% and +12% 1YFR, Hold: Between -5% and +5% 1YFR, Sell: Between -12% and -5% 1YFR, Strong Sell: Less than -12% 1YFR. ValuEngines Valuation and Forecast data are derived from our proprietary quantitative models and consider numerous factors including: firm-specific variables like the Long-run EPS growth rate, the Duration of the Business-growth-cycle, the Volatility of EPS growth rate, the Systematic or beta risk of the firm, the Correlation between the firm's EPS and the interest rate environment, Dividend payout ratio, and Buffer earnings. Model calculations also include interest rate-related criteria as well as technical data such as short and long-term price reversal characteristics.

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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 McDonald's Corp (MCD). McDonald's Corp develops, operates, franchises and services a worldwide system of restaurants that prepare, assemble, package and sell a limited menu of value-priced foods. The company operates primarily in the quick-service hamburger restaurant business. All restaurants are operated by the company or, under the terms of franchise arrangements, by franchisees who are independent third parties, or by affiliates operating under joint-venture agreements between the company and local business people.

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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--(1.982) Semiannual, annual, monthly and quarterly value levels are 2.414, 2.690, 2.715 and 3.053 with a daily pivot at 1.994, and weekly and semiannual risky levels at 1.811 and 1.672.

Commodities and Forex Comex Gold--($1857.5) Monthly, quarterly and semiannual value levels are $1702.3, $1655.8 and $1644.8 with a daily pivot at $1862.5, and weekly risky level at $1940.3. Nymex Crude-- ($89.05) My weekly value level at $82.99 with daily risky level at $91.04, my annual pivots at $99.91 and $101.92 and quarterly, semiannual and monthly risky levels at $102.40, $103.92 and $104.23. The Euro--(1.3879) My quarterly value level is 1.3728 with a daily pivot at 1.3865, and weekly, semiannual and monthly risky levels at 1.4342, 1.4752 and 1.4872. Major Indices Equity Technicals Strength on Tuesday and early Wednesday put the Dow Industrial Average and S&P 500 within striking distance of my annual pivots at 11,491 and 1210.7 but these key technical resistances could not be breached. Stocks remain considerably undervalued but the weekly charts stay negative on closes today below their fiveweek modified moving averages at 11,590 Dow and 1217.1 SPX. Equity Fundamentals: Stocks are undervalued. 84.8% of all stocks are undervalued / 15.2% of all stocks are overvalued. In March 2009, 91.1% of all stocks were undervalued. All sixteen sectors are undervalued, fifteen by double-digit percentages, nine by 20.5% to 27.6%. Back in March 2009 the sectors were undervalued by 33% to 45%. Key Levels for the Major Equity Averages Dow --(11,296) My weekly value level is 10,588 with the 200-week and 120month simple moving averages at 10,695 and 10,593, my annual pivot at 11,491, and daily and monthly risky levels at 11,514 and 12,779. Semiannual value levels are 9,635 and 8,468 with the 50-day and 200-day SMA death cross at 11,840 and 11.998, and quarterly and annual risky levels at 13,839 and 13,890.

S&P 500--(1185.9) Weekly and Semiannual value levels are 1096.2, 981.3 and 855.7 with my annual pivot at 1210.7 and daily and monthly risky levels at 1213.4, 1342.1, the 50-day and 200-day SMAs death cross at 1246 and 1284 and quarterly and annual risky levels are 1467.0 and 1562.9. NASDAQ (2529) Annual, weekly, and semiannual value levels are 2335, 2302, 2199 and 2049 with daily and monthly risky levels at 2592 and 2827, the 50-day and 200-day SMA death cross at 2642 and 2705, and quarterly and annual risky levels at 3109 and 3243. NASDAQ 100 (NDX) (2214) Weekly, semiannual and annual value levels are 2052, 1951, 1861 and 1723 with daily and monthly risky levels at 2262 and 2431, the 50-day and 200-day SMAs death cross at 2264 and 2287, and annual risky level at 2590. Dow Transports (4472) Weekly, and semiannual value levels are 3972 and 3868 with my semiannual pivot at 4335, and daily, annual and monthly risky levels at 4623, 5179 and 5190, and the 50-day and 200-day SMAs death cross at 4924 and 5127. Russell 2000 (694.92) Weekly and semiannual value levels are 611.88, 577.47 and 530.04 with daily, annual and monthly risky levels at 719.77, 784.16 and 825.19 and the 50-day and 200-day SMAs death cross at 758.46 and 794.43. The SOX (352.15) Weekly, annual and semiannual value levels are 307.63, 270.98, 258.97 and 204.67 with daily and monthly risky levels at 356.76 and 418.07, the 50-day and 200-day SMAs death cross at 372.96 and 415.64 and quarterly and annual risky levels at 493.22 and 531.14.
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.

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