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February 5, 2016

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VALUATION WATCH: Overvalued stocks now make up 25!" o# our stocksass$%ned a valuat$on and &'" o# t(ose e)u$t$es are calculated to *eovervalued *+ 2," or more One sector $s calculated to *e overvalued

MARKET OVERVIEW

Inde- .tarted week /r$da+ 01 C(an%e C(an%e " +td

3IA %&()"&) %&%&("& 42!!, 46&5" 47,"

NA.A8 (*+"(, )(*"&& 422!7 4977" 4&&7"

U..;LL 2,,, %))"() ,,.". 49627 4,7," 46&'9"

.<0 5,, %,)&", %*+& 4',79 465" 4!!!"

.ummar+ o# V; .tock Un$verse

.tocks Undervalued &967"

.tocks Overvalued 25!6".tocks Undervalued *+ 2," 7,!"

.tocks Overvalued *+ 2," &'6"

8/20/2019 ValuEngine Weekly: Energy Stocks, Twitter, Valuation Analysis, and ValuEngine Capital

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SECTOR OVERVIEW

.ector C(an%e 1T =T Valuat$on Last 6241

eturn

0>;

at$oAerospace -"%/ -%"./ -,".,/ *"+/ undervalued -%&"&*/ %,"*

Auto4T$res4Trucks %".+/ -%"+)/ -,"*,/ .)"()/ undervalued -.)"+,/ %"*.

?as$c 1ater$als ."+,/ )")%/ -("(/ %+",/ undervalued -.&"+/ ..")&

?us$ness .erv$ces "/ -%",/ -&"*+/ &"(&/ undervalued -%%"(/ .%".

Computer and Tec(nolo%+ ",(/ -"**/ -("/ *"&*/ undervalued -,"../ .&"&)

Construct$on "*%/ -",/ -*"*/ %&",./ undervalued -%"../ %+"(

Consumer $scret$onar+ "../ -"&(/ -&"(+/ %("(,/ undervalued -%%"%/ .)")

Consumer .taples -")/ -%"./ -)",%/ "%/ overvalued -("&%/ .."*,

/$nance "%/ -%"))/ -+"*,/ %%"&./ undervalued -,"(,/ %(".%

Industr$al 0roducts %"&&/ "(/ -&"*/ %")%/ undervalued -%("))/ %&"*&

1ed$cal "./ -"*/ -%."(&/ %*"%/ undervalued -%+"))/ .("&.

1ult$4.ector Con%lomerates "++/ -%",/ -,"%/ &",+/ undervalued -%&"+./ %("%

O$ls4;ner%+ %"./ -%".%/ -,"%%/ %("*+/ undervalued -%",,/ %,",)

eta$l4W(olesale "./ -"&(/ -+".(/ %*"((/ undervalued -%+")/ .."(,

Transportat$on %"+%/ -"%./ -*")*/ %,"(/ undervalued -)"&/ %%"+)

Ut$l$t$es "%&/ -"%%/ -.".,/ "/ undervalued -*")/ .%".

Sector TalkO!l"#E$er%yBelow, we present the latest data on leading Oils/Energy Sector stocks from our 

0ro#ess$onal .tock Anal+s$s .erv$ce We applied some basic liquidity criteria--share

price greater than ! and a"erage daily "olume in e#cess of $%%k shares& We ha"ebeen following the sector closely of late because it has been correlated so tightly too"erall equity price mo"es&

Top4/$ve O$ls>;ner%+ .ector .tocks44.(ort4Term /orecast eturns

T$cker Compan+ Name 1arket 0r$ce Valuat$on@" Last 6241onetn@"

?AB 01234E5 32 %."() 672 )"(,/

0; 8ET190123 E:; &"%* 672 %+",/

NTI 691T<E16 TIE1 ."+% -".%/ %%"%/

VLO V2=E19 E6E1:; &%"+, -%.".*/ %)"*%/

ALW  2=96 >32 8T613 %*"+ -+".)/ %"(/

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Top4/$ve O$ls>;ner%+ .ector .tocks44Lon%4Term /orecast eturns

T$cker Compan+ Name 1arket 0r$ce Valuat$on Last 6241 etrn

?AB 01234E5 32 %."() 672 )"(,/

0; 8ET190123 E:; &"%* 672 %+",/NTI 691T<E16 TIE1 ."+% -".%/ %%"%/

VLO V2=E19 E6E1:; &%"+, -%.".*/ %)"*%/

ALW  2=96 >32 8T613 %*"+ -+".)/ %"(/

Top4/$ve O$ls>;ner%+ .ector .tocks44Compos$te .core

T$cker Compan+ Name 1arket 0r$ce Valuat$on Last 6241 etrn

VLO V2=E19 E6E1:; &%"+, -%.".*/ %)"*%/

T.O TE3919 ?918 +,"+, -.+"+/ -&")&/

3A.O @2 39=21 <9=A:3 *"+( -",/ .")/

0?/ 80B E6E1:; I6? )%"* -%)".+/ %"&/

3B. @I64939=21 <=A: .",& -."(/ )".(/

Top4/$ve O$ls>;ner%+ .ector .tocks441ost Overvalued

T$cker Compan+ Name 1arket 0r$ce Valuat$on Last 6241 etrn

;0; E8 E6E1:; ?8-2 )"(, .,%",,/ -+%")/

0? 8ET190123-2A1 ? )") %%."++/ -(."+(/

C ?2109 ?E125I?3 %&",, %"+(/ -("%*/

.=D 3;6E1:; 1E3 ?8 (",+ ++",(/ -*"%)/

DL/ :>=B5214 9BB3<1 )")* +."+)/ -*)"+/

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Free &o'$loa( )or Rea(er" (s a 0onus to our Free Weekly #ewsletter su0scri0ers,

we are offering a F.EE $W#&$( of one of our Stock .eports  

'witter ('W')* is a public, real-time, global platform where any user can create

a 'weet and any user can follow other users& 'he platform is unique in its simplicity+'weets are limited to $% characters of te#t& 'his constraint makes it easy for anyoneto quickly create, distribute and disco"er content that is consistent across our

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Valu;n%$ne /orecast

 Target

Price*

E#pected

)eturn

1!onth 1"#$$ -%&;%<

%!onth 1"#"& -$&=4<

"!onth 1"#&" -!&;<

1'ear 1(#&) ->&5%<&'ear 1"#&1 -&$5<

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Valuat$on < ank$n%s

aluation n+a aluation Ran-./  n/a

1! 0orecast Return #23 1! 0orecast Return Ran    >

1&! Return (2#4$3 !o5entu5 Ran  -./  $46har7e Ratio #$& 6har7e Ratio Ran-./  4$

(' 8vg 8nnual Return 41#2&3 (' 8vg 8nnual Rtn Ran    4%

olatility (2#%23 olatility Ran-./  !%

E97ecte: EP6 ;rowth &$#113 EP6 ;rowth Ran-./  5?

!aret Ca7 -billions/ 1#$% 6i<e Ran    >4

Trailing P+E Ratio n+a Trailing P+E Ran-./  4?

0orwar: P+E Ratio n+a 0orwar: P+E Ratio Ran    n/a

PE; Ratio #)% PE; Ratio Ran    4

Price+6ales (#4 Price+6ales Ran-./  $?

!aret+=oo %#($ !aret+=oo Ran  -./  4>

=eta 1#%2 =eta Ran    45

8l7ha #$$ 8l7ha Ran    ?

W*at+" ot--

Valuat!o$" Re.a!$ /o' &ue To Market ullback

aluEngine tracks more than =%%% 6S equities, .7)s, and foreign stock whichtrade on 6S e#changes as well as @$%%% 3anadian equities& When E8S estimates are

a"ailable for a gi"en equity, our model calculates a le"el of mispricing or "aluationpercentage for that equity based on earnings estimates and what the stock shouldbe worth if the market were totally rational and efficient--an academic e#ercise to be

sure, but one which allows for useful comparisons between equities, sectors, andindustries& 6sing our aluation :odel, we can currently assign a E "aluationcalculation to more than 4;%% stocks in our 6S 6ni"erse&

We combine all of the equities with a "aluation calculation to track market"aluation figures and use them as a metric for making calls about the o"erall state of

the market& 'wo factors can lower these figures-- a market pullback, or a significantrise in E8S estimates& ice-"ersa, a significant rally or reduction in E8S can raise the

figure& Whene"er we see o"er"aluation le"els in e#cess of @ 5?< for the o"eralluni"erse and/or 4=< for the o"er"alued by 4%< or more categories, we issue a"aluation warning&

We now calculate that 4?&;< of the stocks we can assign a "aluation are

o"er"alued and =&5$< of those stocks are o"er"alued by 4%< or more& 'hese numbersha"e decreased significantly since the beginning of the year--when we saw

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o"er"alued stocks making up closer to %< of the o"erall total& We are now showingstocks that are cheaper from our aluation :odelAs perspecti"e than we ha"e seensince uly, 4%$4 when the SC8 ?%% was trading at $!!=& .ccording to our modelAs

perspecti"e, stocks are cheap right now&

4%$5 is off to challenging start for in"estors& 9alling oil prices, uncertainty about

3hina, and 9ed mo"es on rates ha"e pushed stock prices down to le"els not seen fora while& We ha"e also seen a spate of poor results from companies as "aried asBoeing, .pple, and E##on-:obil& Bargain hunting is always good, but no one wants to

Dcatch a falling knife&D

0ooking ahead, we donAt see much on the horion to make the 9ed follow

through on their plan raise rates again in the near future& 'hat is good news& We alsobelie"e that the recent slight weakening of the dollar will bolster some of the businessupon which the big international players depend& But the 3hinese issue and the

continuing carnage in the oil markets are wreaking ha"oc with sentiment andin"estor confidence&

We are in a presidential election year, which is often a good thing for themarket, but we arenAt sure if that ma#im will hold this year gi"en the fair amount ofbad news floating around out there& .s we noted last month, 4%$5 is pro"ing to be a

bit of a downer so far with in"estors selling off positions and increased "olatility rearingits head once again&

'he chart below tracks the "aluation metrics from 9ebruary 4%$?& 1t shows le"els in

e#cess of %<&

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  'his chart shows o"erall uni"erse o"er "aluation in e#cess of %< "s the SC8 ?%% from9ebruary 4%$!

 

'his chart shows o"erall uni"erse under and o"er "aluation in e#cess of %< "s the SC8

?%% from :arch 4%%=

 FNOT;: T$me .cale Compressed 0r$or to 2,66

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ValuE$%!$e Ca!tal I" o' Autotra(!$% Our

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aluEngine iew Strategy+ 'he aluEngine iew Strategy is the product of asophisticated stock "aluation model that was first de"eloped by

aluEngineAs academic research team& 1t utilies a three factor approach+fundamental "ariables such as a companyAs trailing $4-month Earnings-8er-Share (E8S*, the analyst consensus estimate of the companyAs future $4-

month E8S, and the !%-year 'reasury yield are all used to create a moreaccurate reflection of a companyAs fair "alue& . total of ele"en additionalfirm specific "ariables are also used& 'he aluEngine iew portfolio is

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with some basic rules for market capitaliation and industry di"ersification&'he portfolio has $? stocks and is rebalanced once each month&

.utomatically 'rade Our 8ortfolio Strategies aluEngine :arket 2eutralStrategy+ 'he aluEngine :arket 2eutral Strategy is the product ofaluEngineAs 9orecast :odel& 'his model was de"eloped by a team of 8h7Asand is based on the cutting edge economic theories of Wall Street

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synthesie the data, and then come up with a sector-di"erse list of our bestand worst forecast $-month return stocks& Short and long-term historicfactors in the E 9orecast modelAs calculation include past-"aluation le"els

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