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November 30, 2010
Defense is the Best Offense?
NOC, $NOC, Defense Aerospace Giant Northrop Grumman Leads Short-
Term Quality Screen
Today, we screened our entire database of more than 5000 stocks trading on
US exchanges in an effort to find the best of the best. We used criteria of market price
> $3.00, volume > 100k shares/day, composite score > 700, and one-month forecast
ranking > 98. This sort of screen brings out big market cap stocks with good forecasts,
valuation, p/e ratios, etc. We only got 14 results from this screen, and 13 of them were
ranked "Strong Buy."
Near the top of our list was the Northrop Grumman Corporation
(NOC). ValuEngine has issued a STRONG BUY recommendation for Northrop
Grumman on Nov. 30, 2010. Based on the information we have gathered and our
resulting research, we feel that Northrop Grumman has the probability to
OUTPERFORM average market performance for the next year. The company exhibits
ATTRACTIVE company size, volatility and P/E ratio.
Based on available data as of Nov. 30, 2010, we believe that NOC should be
trading at $69. This makes NOC 11.28% 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 NOC, we base this on actual
earnings per share (EPS) for the previous four quarters of $6.06, forecasted EPS for the
next four quarters of $6.45, and correlations to the 30- year Treasury bond yield of
4.15%.
Northrop Grumman Corporation is a high technology company providing
innovative solutions in systems integration, defense electronics and information
technology for its U.S. and international military, government and commercial
customers, as a prime contractor, principal subcontractor, team member or preferred
supplier.

Subscribers can check out the latest figures on Northrop Grumman from our models
HERE
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MARKET OVERVIEW
Summary of VE Stock Universe
Stocks Undervalued 49.49%
Stocks Overvalued 50.51%
Stocks Undervalued by 20% 22.95%
Stocks Overvalued by 20% 20.90%

SECTOR OVERVIEW
Sector Change MTD YTD Valuation Last 12- P/E
MReturn Ratio
Aerospace -0.03% 0.04% 17.59% 0.86% overvalued 28.76% 19.33
Auto-Tires-Trucks 0.16% 3.32% 40.77% 5.01% overvalued 51.06% 34.84
Basic Materials 0.14% 3.21% 23.74% 18.34% overvalued 61.92% 33.81
Business Services -0.15% 3.16% 8.21% 0.61% undervalued 21.82% 29.59
Computer and Technology -0.45% 2.98% 23.30% 0.43% overvalued 34.07% 40.4
Construction 0.04% 2.85% 1.60% 7.26% undervalued 7.00% 37.53
Consumer Discretionary -0.34% 3.14% 18.93% 2.32% undervalued 27.86% 30.41
Consumer Staples -0.08% 2.97% 7.33% 1.24% overvalued 17.86% 21.89
Finance 0.15% 0.41% 13.60% 0.01% overvalued 15.90% 29.58
Industrial Products 0.02% 3.93% 17.89% 2.86% overvalued 28.07% 27.12
Medical -0.14% 2.12% 11.37% 8.17% undervalued 17.92% 33.42
Multi-Sector Conglomerates -0.32% 2.63% 18.64% 7.87% overvalued 31.61% 32.41
Oils-Energy 0.17% 6.03% 12.66% 16.73% overvalued 43.37% 43.19
Retail-Wholesale -0.24% 4.94% 16.83% 3.96% overvalued 53.38% 26.18
Transportation -0.25% 1.50% 20.08% 4.34% overvalued 29.82% 39.47
Utilities -0.53% -0.29% 4.24% 1.87% overvalued 16.47% 27.46