March 12, 2010

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We are now offering a FREE DOWNLOAD of one of our $ 25.00 Detailed Valuation
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This week's free download is our report on Reddy Ice Holdings (FRZ). Reddy Ice
Holdings, Inc. engages in the manufacture and distribution of packaged ice in the United
States. The company’s ice operations consists of the traditional manufacture and delivery of
ice from a central point of production to the point of sale, as well as sales from The Ice
Factory machines, its proprietary equipment located in high volume locations that produce,
package and store ice through an automated, self-contained process.
ValuEngine has issued a STRONG BUY recommendation for REDDY ICE HOLDINGS
INC. Based on the information we have gathered and our resulting research, we feel that
REDDY ICE HOLDINGS INC has the probability to OUTPERFORM average market
performance for the next year. The company exhibits ATTRACTIVE market valuation,
momentum and price/sales ratio. Our models predict that FRZ will substantial short and long-
term returns as compared to the rest of our universe.
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MARKET OVERVIEW

Thursday 4 day 4 day

Index started week ytd
Close change change %
DJIA 10563.78 10611.8 48.02 0.45% 1.74%
NASDAQ 2326.25 2368.46 42.21 1.81% 3.23%
RUSSELL 2000 665.96 677.22 11.26 1.69% 7.82%
S&P 500 1138.4 1150.24 11.84 1.03% 3.02%

Summary of VE Stock Universe

Stocks Undervalued 46.48%
Stocks Overvalued 53.52%
Stocks Undervalued by 20% 23.20%
Stocks Overvalued by 20% 25.59%

SECTOR OVERVIEW

Sector Change MTD YTD Valuation Last 12- P/E Ratio

MReturn
Basic Industries 0.32% 4.93% 4.20% 13.31% overvalued 119.68% 27.32
Capital Goods 0.37% 5.72% 8.23% 10.96% overvalued 100.17% 23.09
Consumer Durables 0.15% 5.07% 8.09% 15.01% overvalued 108.76% 25.4
Consumer Non-Durables 0.59% 4.06% 5.80% 4.78% overvalued 106.78% 19.05
Consumer Services 0.41% 5.81% 8.57% 4.97% overvalued 106.96% 22.92
Energy 0.31% 3.73% 1.46% 11.51% overvalued 110.27% 21.71
Finance 0.39% 4.05% 7.23% 3.48% overvalued 69.95% 19.09
Health Care 0.42% 4.43% 6.27% 2.30% undervalued 87.81% 21.5
Public Utilities 0.32% 3.45% -0.25% 2.06% overvalued 64.50% 16.5
Technology 0.14% 3.82% 6.16% 1.18% undervalued 101.47% 28.36
Transportation 0.50% 4.66% 6.87% 4.32% overvalued 105.83% 20.72
Industry Talk
--Retail Goods

The financial media was all over the latest sales figures for retailers this morning.
Despite the blizzard conditions in many areas, U.S. retail sales posted gains of .3% for
February. Bullish sorts will use this information to bolster their contention that the worst of the
recession is over and the U.S. consumer is beginning to open her wallet. Below, we provide a
list of the top-five Retail Goods industry tickers in various categories.

Top-Five Most Overvalued Retail Goods Tickers

Last 12-M
Ticker Name Mkt Price Valuation(%) P/E Ratio
Retn(%)
BKS BARNES & NOBLE INC. 20.45 300 19.24 21.47
TUES TUESDAY MORNING CORP 6.73 300 968.25 67.3
MOVADO GROUP
MOV 13.82 286.81 151.73 N/A
INCORPORATED
BONT BON-TON STORES INC 12.73 206.44 857.14 N/A
CHRS CHARMING SHOPPES INC 6.6 137.84 1122.22 N/A

Top-Five One-Month Forecast Retail Goods Tickers

Last 12-M
Ticker Name Mkt Price Valuation(%) P/E Ratio
Retn(%)
EXPE EXPEDIA INC 22.9 -30.91 223.45 16.76
PIR PIER 1 IMPORTS 7.26 -34.52 5950 N/A
SMRT STEIN MART INC 9.19 -28.73 699.13 15.19
JWN NORDSTROM INC 38.94 -16.22 175.78 19.97
FUQI FUQI INTERNATIONAL INC 20.45 -2.38 477.68 9.21

Bottom-Five One-Month Forecast Retail Goods Tickers

Last 12-M
Ticker Name Mkt Price Valuation(%) P/E Ratio
Retn(%)
BBI BLOCKBUSTER INC - CLASS A 0.42 -58.89 5 N/A
BEBE BEBE STORES INC 9 91.88 80.72 N/A
CPWM COST PLUS 2.38 -20.34 240 N/A
ZLC ZALE CORP 3.03 N/A 203 N/A
CONN CONN'S INC 6.85 N/A -44.04 N/A
 VE Premium Website Stock Analysis subscribers can find complete valuation, forecast,
and ratings data on the above tickers as well as the rest of the Sector components HERE.

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Training Tip
--Ratings Drift
As we discussed last week, ValuEngine's Ratings Model rates stocks on a 1-5 “engine”
or Buy/Hold/Sell scale.
The model evaluates 5 major criteria for each ticker in our 4000 stock universe every
single day and then assigns it an overall composite score. In this manner, it takes outputs
from both the Forecast and Valuation Models to derive a rating.
Sometimes we get calls asking about why a particular ticker may be a STRONG BUY
one day, a BUY the next, and then perhaps a STRONG BUY the day after that--or a SELL,
HOLD, SELL--even though nothing has changed for the stock--e.g. no big change in EPS,
share price, company news, etc. Of course, the person asking the question about the rating
is usually up on such things, because knowing a given stock's day-to-day rating is not
something a non-expert would typically know.
Is Ratings Drift a "Feature" or a "Bug"?
Always keep in mind that a stock which shows such ratings activity is typically resting
right on the cusp of the ratings cut-offs of our bell curve system. Take a stock like Goldman
Sachs (GS). As of today it has a composite ranking--which is used to determine the rating--in
the top 3% of our universe. However, the cut off for a STRONG BUY is 2%. So, any minor
change near the top of our universe may result in GS fluctuating in and out of the STRONG
BUY rating.
 Activity which results in a small shift of 1-2% in the composite rankings most definitely
falls into the category of "noise." This is why clients are always advised to be aware of how
these ratings are derived. You would probably NOT want to be making trades based on such
minor fluctuations unless additional research had you convinced that there really was an
underlying issue with a given ticker--and you certainly would not want to start dumping shares
of GS simply because it had gone from STRONG BUY to BUY based on a drop from the top
98% of our universe to the top 97%.
There are pros and cons to the ratings system, and sometimes the confusion caused
by ratings drift can seem like a problem. But, as always when discussing ratings, the
important thing to remember is that the system is always rating tickers relative to the
rest of the database. So, a stock rating may change even if nothing has really changed
fundamentally or technically with the ticker. You can check this out by looking at the overall
composite rank of the stock and comparing it to the cut off points for the individual ratings.

What's Hot
--Suttmeier in the News

ValuEngine Chief Market Strategist Richard Suttmeier appeared on numerous media

outlets as his analysis of the FDIC Quarterly Banking Profile made headlines this week.

Click any of the graphics below to watch the web video of Suttmeier's recent media
appearances.

Suttmeier on Yahoo
 Suttmeier on CNBC

Suttmeier on BNN

--Eric Stokes Editor of the ValuEngine View

It can be a big job sorting through which stocks in the ValuEngine universe represent
the best risk/reward. Some investors like to do it themselves, but others would prefer having a
professional money manager do the heavy lifting. That’s why each month Eric Stokes, a
hedge fund manager and Principal at Reed-Stokes Capital
Partners--and author of "Market Neutral Investing," reviews
the top selections generated by VE’s models and carefully
researches each one. The very best 15 ideas are then
selected for inclusion in our ValuEngine View Newsletter.
The ValuEngine View newsletter is the product of
some of ValuEngine's most sophisticated academic
research. The newsletter strategy integrates the outputs of
our Valuation Model with some basic share price, market
cap, and industry diversification rules to create an initial
portfolio that is carefully analyzed and refined by Stokes.
 Stokes has recently made some changes to our strategy in order to boost
performance. We now generate investment ideas from our Forecast model and our Valuation
model. Utilizing the best ideas from both of our cutting-edge benchmark portfolio strategies
along with his stock-picking and market expertise, Stokes has increased returns significantly.
Since the refinement of our stock picking strategy, the ValuEngine View has
outperformed the S&P every single month!
Since the market bottom in March, 2009, the ValuEngine View is beating the S&P 500
by almost 20%!
To find out more about the ValuEngine View, 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

Major Indices

The DOW-- My call is for Dow 8,500 Before 11,500 – The

61.8% Fibonacci Retracement is 11,263.

Housing and Banking

From my perspective, the US economy will have a difficult time in

sustaining economic growth with job creation from small businesses on
Main Street USA. State and local government budget cuts are at least
cutting employee hours if not shedding jobs all together. More Americans are working less
than twenty hours a week--which enables them to get at partial unemployment. This is one
statistic that’s tough to track in the weekly Initial Jobless Claims--which remain well above the
Recessionary 350,000 level. In the monthly employment data, workers are considered
"employed" even if they worked only one hour during the survey week.
 President Obama promised that “shovel ready” jobs would be funded, but where are
they? Jobs on Main Street have depended upon construction, and that part of the economy
lost 64,000 jobs in February. Small businesses either don’t want to borrow due to economic
uncertainties, and those that want a loan can’t get one as more than half of the community
banks of America have a growing problem with non-current loans with loans outstanding more
than 80% disbursed versus loan commitments. Yet Wall Street is willing to speculate that
some of the community banks are buys.

The America’s Community Bankers’ Index (ABAQ) is up 10.6% year to date, but
this group of more than 500 smaller banks will be the source of some of the 150 to 200 banks
that will fail in 2010. Predicting the winners and losers is not easy, and the ValuEngine List of
Problem Banks can help you handicap, which to buy, sell or avoid. ABAQ does not deserve to
be at a 52-week high. I see an extreme overbought condition on the daily chart. I bet that
as these banks rise in price insiders will be selling-- as they did during the ban on
shorting in 2008.

The Regional Bankers Index (BKX) is up a whopping 19.2% year to date, as

investors rush to buy those “too big to fail” banks; Bank of America, which rates a HOLD,
Citigroup, which was upgraded to a BUY before this week’s price spike, JP Morgan is an
overvalued BUY and Wells Fargo has been a STRONG BUY. The BKX is also at a 52-week
high with an extreme overbought condition. I worry about these ratings as they are based
upon typical financial data filings, ignoring the bulging toxic loans that the Congressional
Oversight Panel is worried about. These banks have been huge creators of those $213 trillion
in notional amount of derivative contacts.

--The ValuEngine FDIC Report

ValuEngine Chief Market Strategist Richard Suttmeier is an expert on the US Banking

System and uses the health of the system as a leading economic indicator. He distills his
thoughts on the banking system in our FDIC Report.

We have updated the FDIC Report to include the latest VE datapoints on all problem
banks as well as Suttmeier's latest predictions for the US banking system and economy. After
reviewing the Q4 2009 FDIC QBP, Suttmeier finds that the US banking system remains under
considerable stress. He now believes that we will not see an end to the credit crisis that
began with the deflation of the housing market bubble for another four years—at least.
Suttmeier also predicts a Double-Dip recession.
 A critical portion of this report is the ValuEngine List of Problem Banks. Problem banks
are publicly traded FDIC insured financial institutions who are overexposed to Construction &
Development Loans and/or Nonfarm nonresidential real estate loans, with “1-Engine”--Strong
Sell, or “2-Engine”—Sell. The report also includes a listing of all other engine-rated banks--
and those with “n/a” ratings but forecast figure data points according to our models-- in
violation of FDIC guidelines vis-a-vis loan exposures.

Our latest ValuEngine FDIC Report for Q4 2009 is now posted. The report contains
loan exposure and/or ValuEngine datapoints on valuation, forecast, and ratings for all
of the institutions on our List of Problem Banks.

Subscribers may download it now HERE.

Others interested in the report may find out more on our website by clicking the image
below.