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December 2, 2010
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 46.11%
Stocks Overvalued 53.89%
Stocks Undervalued by 20% 21.79%
Stocks Overvalued by 20% 23.17%

SECTOR OVERVIEW
Sector Change MTD YTD Valuation Last 12- P/E
MReturn Ratio
Aerospace 0.42% 0.00% 17.67% 3.50% overvalued 30.81% 19.62
Auto-Tires-Trucks 2.70% 0.00% 45.22% 8.10% overvalued 50.45% 35.25
Basic Materials 2.04% 0.00% 27.36% 22.51% overvalued 60.52% 34.99
Business Services 2.35% 0.00% 9.03% 1.27% overvalued 21.76% 29.93
Computer and Technology 1.42% 0.00% 24.35% 2.52% overvalued 33.14% 41.01
Construction 1.83% 0.00% 3.29% 4.84% undervalued 7.58% 37.94
Consumer Discretionary 1.32% 0.00% 19.30% 0.36% undervalued 27.29% 30.85
Consumer Staples 0.73% 0.00% 8.15% 2.61% overvalued 17.51% 22.07
Finance 1.55% 0.00% 14.35% 1.47% overvalued 14.88% 29.7
Industrial Products 1.50% 0.00% 21.10% 5.39% overvalued 29.40% 27.61
Medical 0.97% 0.00% 11.62% 7.02% undervalued 15.82% 33.67
Multi-Sector Conglomerates 2.27% 0.00% 21.00% 10.64% overvalued 32.24% 33.11
Oils-Energy 1.22% 0.00% 12.95% 20.57% overvalued 42.47% 43.54
Retail-Wholesale 0.66% 0.00% 17.14% 5.33% overvalued 59.23% 26.2
Transportation 1.68% 0.00% 21.95% 6.59% overvalued 28.69% 39.75
Utilities 1.32% 0.00% 4.83% 3.37% overvalued 14.96% 27.73