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December 2, 2010

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Home is Where the Heart is...
HD, $HD, Stocks Jump Again on Positive Home Sales Report, Home Depot Leads the Way
So far today stocks are up once more as investors have reacted positively to good news on the housing front. The National Association of Realtors announced a 10% jump in their pending home sales index. Of course, NAR is not always a reliable source--due to the bias towards good news--and the figure remains more than 20% off last year's number. In any case, good news for housing has caused a pop for improvement centers such as Home Depot (HD.) The good news on the housing front adds to the momentum HD found when it announced an earnings beat a few weeks ago. As of today, our models agree that HD is a viable target for investors. ValuEngine has issued a BUY recommendation for Home Depot . Based on the information we have gathered and our resulting research, we feel that Home Depot has the probability to OUTPERFORM average market performance for the next year. The company exhibits ATTRACTIVE company size, volatility and price/sales ratio. Based on available data as of Dec. 02, 2010, we believe that HD should be trading at $29.82. This makes Home Depot 6.01% overvalued. 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 HD, we base this on actual earnings per share (EPS) for the previous four quarters of $1.89, forecasted EPS for the next four quarters of $2.11, and correlations to the 30- year Treasury bond yield of 4.24%. Home Depot is the one of world's largest home improvement retailer. Home Depot stores cater to do-it-yourselfers, as well as home improvement, construction and building maintenance professionals. The Home Depot currently operates in the USA, Canada, Chile, Puerto Rico, and Argentina. The company also operates EXPO Design Centers across the U.S. and Villager's Hardware in New Jersey. Subscribers can check out the latest figures on Home Depot from our models HERE

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MARKET OVERVIEW
Summary of VE Stock Universe
Stocks Undervalued Stocks Overvalued Stocks Undervalued by 20% Stocks Overvalued by 20% 46.11% 53.89% 21.79% 23.17%

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
0.42% 2.70% 2.04% 2.35% 1.42% 1.83% 1.32% 0.73% 1.55% 1.50% 0.97% 2.27% 1.22% 0.66% 1.68% 1.32%

MTD
0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%

YTD
17.67% 45.22% 27.36% 9.03% 24.35% 3.29% 19.30% 8.15% 14.35% 21.10% 11.62% 21.00% 12.95% 17.14% 21.95% 4.83%

Valuation
3.50% overvalued 8.10% overvalued 22.51% overvalued 1.27% overvalued 2.52% overvalued 4.84% undervalued 0.36% undervalued 2.61% overvalued 1.47% overvalued 5.39% overvalued 7.02% undervalued 10.64% overvalued 20.57% overvalued 5.33% overvalued 6.59% overvalued 3.37% overvalued

Last 12MReturn
30.81% 50.45% 60.52% 21.76% 33.14% 7.58% 27.29% 17.51% 14.88% 29.40% 15.82% 32.24% 42.47% 59.23% 28.69% 14.96%

P/E Ratio
19.62 35.25 34.99 29.93 41.01 37.94 30.85 22.07 29.7 27.61 33.67 33.11 43.54 26.2 39.75 27.73