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November 13, 2009
MARKET OVERVIEW

Thursday 4 day 4 day
Index started week ytd
close change change %
DJIA 10020.62 10197.47 176.85 1.76% 16.25%
NASDAQ 2128.46 2149.02 20.56 0.97% 36.11%
RUSSELL 2000 583.85 580.32 -3.53 -0.60% 16.18%
S&P 500 1072.31 1087.24 14.93 1.37% 20.40%

Summary of VE Stock Universe
Stocks Undervalued 57.30%
Stocks Overvalued 42.70%
Stocks Undervalued by 20% 30.87%
Stocks Overvalued by 20% 21.24%

SECTOR OVERVIEW

Sector Change MTD YTD Valuation Last 12- P/E Ratio
MReturn
Basic Industries -1.64% 5.23% 66.82% 11.62% overvalued 87.10% 25.49
Capital Goods -2.04% 3.29% 33.60% 5.44% overvalued 40.13% 21.28
Consumer Durables -1.43% 6.11% 59.45% 8.81% overvalued 56.06% 26.3
Consumer Non-Durables -0.88% 3.10% 48.58% 7.00% overvalued 53.10% 21.35
Consumer Services -1.40% 2.72% 53.34% 0.11% undervalued 62.61% 21.34
Energy -2.27% 4.09% 41.32% 10.05% overvalued 44.26% 18.54
Finance -1.58% 0.55% 22.09% 2.19% undervalued 20.85% 18.56
Health Care -1.72% 2.79% 52.36% 12.28% undervalued 47.77% 19.48
Public Utilities -1.08% 2.31% 18.99% 2.98% undervalued 39.01% 16.91
Technology -0.96% 4.06% 65.70% 5.98% undervalued 59.40% 25.76
Transportation -1.87% 6.21% 23.02% 2.32% overvalued 29.85% 18.37
Sector Talk
--Precious Metals
As you can see from the chart below, Gold has been on a tear since July. It is hard to listen
to almost any talk radio these days without hearing the host--regardless of political ideology--
shilling for Gold. As is typical, the current rally in Gold is driven by fears of inflation as a result
of the massive fiscal stimulus being utilized by governments across the globe in an attempt to
fight the economic downturn brought on by the credit melt-down and subsequent market
crash.
Those fearing a weak dollar flee to Gold as a hedge despite the fact that as of yet there is
nary a hint of inflation in site--indeed, many analysts argue that we are in a deflationary period
and find that some inflation would be a good sign for the economic recovery.
It is worthwhile to note that while Gold made a high in dollar terms recently, adjusting for
inflation it is nowhere near the levels it hit during the early 1980s. Still, news that India
recently increased its Gold reserves set off another wave of buying among those worried
about the long-term prospects of the dollar.

Courtesy Goldprice.org

Gold is a tough play, rife with issues not found in other investments. Many investors are not
satisfied unless they take physical possession of the metal, some prefer ETFs, and others
look to individual equities to make their forays into Au--and some even look to other precious
metals in order to avoid the stampede. For those in the latter category, we provide a list of
tickers from the Precious Metals Industry which have the highest short-term forecast return
figures.
While many of these tickers have developed huge momentum over the past 12 months,
hardly any of them are buy-rated and their longer-term prospects appear dim to our models.
Keep in mind that much of this buying may not be based on fundamentals easily digested by
our models. Panic and fear are hard to quantify, and thus it is left up to the investor to judge
whether some exposure to the Precious Metals Industry makes sense for their own portfolio.

Top One-Month Forecast Precious Metals Tickers

Last 12- Forecast Forecast
Mkt Valuation VE P/E
Ticker Name M 1-Month 1-Yr
Price (%) Rating Ratio
Retn(%) Retn(%) Retn(%)
HL HECLA MNG CO 5.34 22.71 3 408.57 1.48 -5.11 N/A
DROOY DRDGOLD LTD 4.95 -35.18 3 55.66 0.82 -9.71 11.21
SVM SILVERCORP METALS INC 5.98 -21.59 3 309.59 0.54 -9.47 51.26
GFI GOLD FIELDS LIMITED 14.1 -4.96 3 149.56 0.51 -10.28 37.18
NGD NEW GOLD INC 3.81 20.93 3 252.78 0.47 -15.83 59.84
NORTHERN DYNASTY
NAK 7.02 -19.55 3 183.06 0.37 -11.94 N/A
MINERALS LTD
ANV ALLIED NEVADA GOLD CORP 11.26 51.74 3 463 0.37 -14.48 N/A
BAA BANRO CORP 2.21 N/A N/A 179.75 0.36 -16.24 N/A
SA SEABRIDGE GOLD INC 23.34 -10.41 3 155.92 0.35 -10.17 212.18
KMT KENNAMETAL INC 24.36 -11.98 3 55.36 0.34 -8.16 272.69
HARRY WINSTON DIAMOND
HWD 9.57 -72.94 3 40.53 0.33 -3.55 N/A
CORP
IMPUY IMPALA PLATINUM HLDGS 22.7 15.46 3 130.22 0.3 -5.93 18.72
BREAKWATER RESOURCES
BWLRF 0.32 N/A N/A 296.13 0.27 -13.93 31.69
LIMITED
AMCOL INTERNATIONAL
ACO 27.25 -5.2 3 59.73 0.25 -1.87 31.06
CORPORATION
AZK AURIZON MINES LTD 4.74 25.79 3 248.53 0.2 -12.4 29.66
HMY HARMONY GOLD MINING LTD 10.26 -2.54 4 71.57 0.18 -5.27 15.66
EVOGF EVOLVING GOLD CORP 0.88 N/A N/A 526.21 0.09 -21.67 N/A
JMPLY JOHNSON MATTHEY PLC 51.06 11.71 N/A N/A 0.05 -5.82 18.89
AUY YAMANA GOLD INC 12.28 26.65 3 205.47 0.03 -10.43 29.73
NEM NEWMONT MINING CORP 49.64 5.12 3 106.15 -0.09 -5.6 24.29
--The ValuTrader Model Portfolio Newsletter
The ValuTrader Model Portfolio Newsletter is based on ValuEngine Chief Market Strategist
Richard Suttmeier's proprietary market analytics. Suttmeier combines his technical analysis
expertise with ValuEngine's proprietary valuation, forecast, and ratings data for more than
4000 equities trading on US markets to come up with a 20 stock portfolio tailored to current
market conditions. With ValuTrader, subscribers access Suttmeier's "Buy and Trade" strategy
with a portfolio designed to function well in both up and down markets.
For more on the Suttmeier ValuTrader Newsletter Portfolio, Click the Logo Below

Suttmeier Says
--Commentary and Analysis from Chief Market Strategist Richard Suttmeier

If you have any comments or questions, send them to Rsuttmeier@Gmail.com

Housing
The US Federal Housing Administration (FHA) will likely join Fannie
and Freddie as a ward of US tax payers. The FHA's excess reserves
available to cover losses have fallen to 0.53% of the agency's book of
business at the end of Q3 2009. This is down from 3% year over year.
The cushion mandated by Congress is 2%, so the health of the FHA is a
huge Red flag for the housing market and tax payers.
If the FHA needs an appropriation from Congress it would be the first time in its 75-year
history. Since they are an arm of the US government the Treasury would have no choice but
to rebuild its reserves.
The FHA insures mortgages for eligible borrowers, and its business has increased to meet
demand as private-sector lenders have pulled back during the housing downturn. Rising
defaults on FHA loans will mean that a taxpayer bailout will be needed. Defaults on FHA
backed loans reached 8.24% in September, up from 8.1% in August and 6.1% one year ago.
As a result of this stress, the FHA is tightening its lending standards, which is another drag
on housing.
The Housing Sector Index (HGX) failed at its 50-day simple moving average the past two
days at 102.67. This indicates risk to the 200-day at 88.67.

Here is our latest data on the Home Building Industry. We continue to see poor short and
long-term forecast figures despite the decent LTM performance--which is a result of many of
these tickers snapping back sharply from the brink of disaster when the markets crashed.
Home Building Industry Tickers

Last 12- Forecast Forecast
Mkt Valuation VE P/E
Ticker Name M 1-Month 1-Yr
Price (%) Rating Ratio
Retn(%) Retn(%) Retn(%)
AXR AMREP CORPORATION 13.42 29.08 1 -53.96 -2.01 -26.92 N/A
BROOKFIELD HOMES
BHS 6.5 N/A N/A -28.96 -6.93 -76.26 1.29
CORPORATION
BZH BEAZER HOMES 5.46 -70.94 3 200 -1.3 -29.9 N/A
COMSTOCK HOMEBUILDING
CHCI 0.87 N/A N/A 295.45 -6.91 -49.07 N/A
COS INC
CVCO CAVCO INDUSTRIES INC 33.4 42.8 2 22.84 -2.89 -20.48 N/A
CORPORACION GEO SAB DE
CVGFY 10.65 N/A N/A 90.18 -2.22 -23.48 N/A
CV
DHI D R HORTON INC 11.86 -28.38 3 116.03 -1.3 -15.29 N/A
DWAHY DAIWA HOUSE IND LTD 100.48 12.55 3 26.39 -1.72 -21.15 32.4
GSPI Green Star Products Inc 0.01 N/A N/A -51.67 -1.66 -37.05 N/A
DESARROLLADORA HOMEX
HXM 34.61 -31.15 3 98.79 -2.41 -25.91 14.43
SAB DE CV
KBH KB HOME 15.07 -51.78 3 22.82 -1.95 -20.74 N/A
LEN LENNAR CORPORATION 14.54 -35.79 3 135.28 -1.64 -21.86 N/A
MDC MDC HOLDINGS 32.43 -13.61 3 25.99 -2.21 -15.41 N/A
MHO M/I HOMES INC 12.19 -34.3 3 18.01 1.51 -7.05 N/A
MTH MERITAGE HOMES CORP 19.24 -3.94 3 82.02 -0.1 -13.49 N/A
NVR NVR INC 688.89 104.86 3 100.23 -2.5 -16.9 33.35
OHB ORLEANS HOMEBUILDERS INC 2.01 N/A N/A 16.18 -3.04 -32.21 N/A
PGTI PGT INC 2.27 11.61 1 19.47 -9.34 -50.24 N/A
PHM PULTE HOMES INC 9.78 -24.17 3 12.54 -0.11 -11.71 N/A
RYL RYLAND GROUP INC 19.51 -8.68 2 32.27 -2.04 -19.23 N/A
SKHSY SEKISUI HOUSE LIMITED 8.68 54.5 2 12.58 -2.3 -20.23 77.16
SPF STANDARD PACIFIC CORP 3.46 -75 3 114.91 -0.79 -27.29 N/A
TOL TOLL BROTHERS INC 20.99 -12.41 3 17.39 -0.46 -7.77 N/A
Banking
Today is "Bank Failure Friday," and banks are failing at a faster pace of the past seventeen
years. In the first half of 2009 the FDIC closed 45 banks, which cost the Deposit Insurance
Fund $12.5 billion. In the second half of 2009 through November 6th the FDIC closed 75
banks, which cost the Deposit Insurance Fund another $19.8 billion.
The FDIC is requiring member banks to pre-pay fees for 2010 through 2012 to rebuild its
Deposit insurance Fund. The total take from the banking system is $45 billion. This is a bad
decision as banks struggle with increasing bad loans. Remember that more than 3,000 banks
are overexposed to C&D and CRE loans.
As the FDIC awaits the $45 billion in three year prepaid fees due at year end, I estimate that
the Deposit Insurance Fund is in arrears by $9.4 billion. Meanwhile the banks strapped to
make these payments will reduce lending, and will become more vulnerable for failure.
My idea is to simply turn over the remaining $210 billion in TARP funds to the FDIC and
credit the money to the Deposit Insurance Fund. This would take the fund back above the
1.15% ratio of insured deposits, which is required by June 2013. On June 30 the ratio was a
paltry 0.22%. I would rather see the FDIC tap its temporary $500 billion line of credit with the
US Treasury than tap struggling member banks.
The America’s Community Bankers Index (ABAQ) stayed below its 50-day and 200-day
simple moving averages at 143.31 and 146.82.
The Regional Bankers Index (BKX) stayed below 21-day and 50-day simple moving
averages at 44.57 and 45.82 this week with the 200-day as support at 37.34.
Here is a list of our current buy-rated Banking Industry tickers. Note that the list is totally
dominated by foreign banks and that of our of 501 industry components, only these
institutions are rated a buy! You cannot have a bull market for stocks with a bear market
in bank stocks!
Buy-Rated Banking Industry Tickers*

Forecast 1-
Mkt Valuation Last 12-M Forecast 1- P/E
Ticker Name Month
Price (%) Retn(%) Yr Retn(%) Ratio
Retn(%)
AUSTRALIA & NEW ZEALAND
ANZBY 20.9 -1.32 134.04 0.2 10.09 16.02
BANKING
BBD BANCO BRADESCO 20.38 -0.27 117.97 1.1 15.87 16.89
BANCO BILBAO VIZCAYA
BBV 18.86 -1.62 93.83 1.02 10.75 10.57
ARGENTARIA
CIB BANCOLOMBIA S.A. 41.83 -3.05 137 0.33 12.78 15.44
GREAT SOUTHERN BANCORP
GSBC 22.43 -24.7 141.18 0.12 0.78 6.12
INC
STD BANCO SANTANDER SA 17.12 -10.98 122.05 1.24 14.31 11.49
Ticker Name Mkt Valuation Last 12-M Forecast 1- Forecast 1- P/E
Price (%) Retn(%) Month Yr Retn(%) Ratio
Retn(%)
WBK WESTPAC BANKING CORP 118.65 -10.48 111.23 1.31 17.68 16.49
BAP CREDICORP (C) 72.24 13.97 84.05 -0.08 2.79 14.78
BCH BANCO CHILE 49.9 21.29 79.05 -0.32 3.13 15.24
BFR BBVA BANCO FRANCES SA 6.69 1.15 185.9 -0.19 7.53 7.75
BKEAY BANK OF EAST ASIA LTD 4.3 41.8 134.97 -1.08 9.68 26.65
BMA BANCO MACRO SA 31.5 49.72 284.15 -0.39 16.95 10.03
BMO BANK OF MONTREAL 48.59 -4.88 56.09 -0.34 -3.54 12.59
BNS BANK OF NOVA SCOTIA 45.61 13.63 59.14 -0.46 -2.96 13.93
CANADIAN IMPERIAL BANK
CM 62.24 -4.17 61.2 -0.34 -3.71 11.31
COMM
DB DEUTSCHE BANK 74.1 -5.29 138.72 1.54 31.19 45
DBS GROUP HOLDINGS
DBSDY 40.65 17.68 88.46 -0.4 1.42 11.87
LIMITED
FFBC FIRST FINANCIAL BANCORP 12.83 -64.6 7.1 5.66 -0.59 2.77
HDB HDFC BANK 128.46 5.95 132.8 0.44 18.13 33.03
IBN ICICI BANK LTD 38.55 25.31 163.86 -0.18 15.2 24.62
ITUB ITAU UNIBANCO HOLDING SA 21.56 1.91 106.32 0.53 11.57 21.46
KB KB FINANCIAL GROUP INC 49.9 65.46 129.64 -1.22 3.1 15.52
NATIONAL AUSTRALIA BANK
NABZY 27.36 14.9 131.67 0.7 15.39 15.22
LTD
RY ROYAL BANK OF CANADA 54.24 1.18 59.86 -0.18 -1.85 14.48
SAN BANCO SANTANDER CHILE SA 60.49 44.38 92.77 -0.74 3.33 17.04
SCGLY SOCIETE GENERALE 14.78 -22.78 62.42 -0.61 1.26 42.63
TD TORONTO-DOMINION BANK 62.98 7.95 55.89 -0.34 -4.23 12.65
UOVEY UNITED OVERSEAS BANK 26.96 11.96 75.64 1.48 15.29 10.7
*Please note that in general we are seeing a trend where many buy-rated stocks have poor forecast calculations. Remember that
our ratings are set up as a hard bell curve whereby the top 17% of the universe will always be buy-rated no matter the forecast
figures. This indicates that these stocks are relatively stronger than the rest of our 4000 ticker universe based on other factors
such as Valuation, P/E Ratio, Market Cap, and Momentum (LTM return).