8/20/2019 ValuEngine Weekly: Transportation Stocks, General Electric, Sears Earnings, and ValuEngine Capital

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December 4, 2015

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The ValuEngine Weekly is an Investor Education newsletter focused on the quantitative approach toinvesting and the tools available from In today's fast-moving and globalied financial markets! it is easy to

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VALUATION WATCH: Overvalued stocks now make up 48!"# o$ ourstocks ass%&ned a valuat%on and "'()# o$ t*ose e+u%t%es are calculated to,e overvalued ,- ./# or more 0%&*t sectors are calculated to ,eovervalued

MARKET OVERVIEW

Inde1 2tarted week 3r%da- 5 C*an&e C*an&e # -td

67IA %&()"* %&&(") )494 /!(# /94#

NA26A +%,"+ +("+) 4//9 /'8# '8)#

;U220LL ./// %)()"&& %%&."+ .9.' ."8# .(4#

2< !// )(("+ )(&)"&, "8.. /8'# /9'#

2ummar- o$ V0 2tock Un%verse

2tocks Undervalued !"4)#

2tocks Overvalued 48!"#

2tocks Undervalued ,- ./# .(4/#

2tocks Overvalued ,- ./# "'()#

8/20/2019 ValuEngine Weekly: Transportation Stocks, General Electric, Sears Earnings, and ValuEngine Capital

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SECTOR OVERVIEW

2ector C*an&e 5T6 =T6 Valuat%on Last ".5

;eturn

>0

;at%oAerospace -("+&/ -("/ )"%./ )"+./ overvalued -)"(&/ )("%+

AutoT%resTrucks -%",(/ -)"+./ -.")./ "%,/ undervalued -"+/ %,"*

?as%c 5ater%als -(",./ -("*/ -%"(./ %)"+/ undervalued -),"+/ ),"%,

?us%ness 2erv%ces -%",%/ -%"(*/ )".,/ ."(./ overvalued -*"*+/ )*".

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

Construct%on -%"(/ -%"+/ %"&*/ %"%./ overvalued -,"*+/ )("

Consumer 6%scret%onar- -%",+/ -%"))/ -("%&/ %"*&/ undervalued -+"(*/ )+"++

Consumer 2taples -("*/ -("+*/ ."+./ ."+/ overvalued -(",&/ ),"&.

3%nance -("/ -%",(/ %"&&/ )",,/ overvalued -,"%*/ %.",)

Industr%al roducts -%"(+/ -%"+/ -&"()/ %"(/ undervalued -",+/ %"

5ed%cal -)"(/ -)"(./ ,"%./ ,"(/ overvalued %"+/ )&"&*

5ult%2ector Con&lomerates -("(/ -%")+/ -".%/ *"&+/ overvalued -%("*./ %&".,

O%ls0ner&- -("&,/ -)"./ -)*"+)/ "+/ undervalued -,",+/ ),"*

;eta%lW*olesale -%"+,/ -%".+/ -",,/ +"&)/ undervalued -"+(/ ))"&.

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

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

Sector Talk—Tra!"ortat#oBelow, we present the latest data on leading Transportation Sector stocks from

our ro$ess%onal 2tock Anal-s%s 2erv%ce These results were filtered by market priceand volume--no results below 3$/share or less than !!k shares/day volume"

Top3%ve Transportat%on 2ector 2tocks2*ortTerm 3orecast ;eturns

T%cker Compan- Name 5arket r%ce Valuat%on Last ".5 ;etrn

TN@ TEE012 T130E45 &"), -))"&/ +&"+)/

6HT 67T 7896I3:5 &" -%,")+/ )&")*/

NNA 31VI85 ;14I 1<= ,"** -%("/ %".)/

A2C  146;84E 57I>>I3 %)"** 3?1 )"%/

VL;2 <83T48916841 V9 %&"+ 3?1 %%&",/

8/20/2019 ValuEngine Weekly: Transportation Stocks, General Electric, Sears Earnings, and ValuEngine Capital

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8/20/2019 ValuEngine Weekly: Transportation Stocks, General Electric, Sears Earnings, and ValuEngine Capital

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$ree Do%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  

#eneral lectric %ompany &#' operates as a technology and financial

services company" (ts segments include nergy (nfrastructure, )viation, *ealthcare,Transportation, *ome + Business Solutions and # %apital" The companys nergy(nfrastructure segment offers wind turbines gas and steam turbines and generators"

(ts )viation segment offers .et engines, turboprop and turbo shaft engines, aerospacesystems and euipment" (ts *ealthcare segment provides medical imaging andinformation technologies, medical diagnostics, patient monitoring systems" (ts

Transportation segment provides drive technology solutions to various industries" (ts*ome and Business Solutions segment provides home appliances lighting products,plant automation, hardware, software, and embedded computing systems" (ts #

%apital segment offers commercial loans and leases, fleet management, financialprograms, credit cards, personal loans and other financial services" #eneral lectric%ompany is headuartered in 0airfield, %onnecticut"

1alungine continues its *24 recommendation on #5 %T6(% for 7!8-7-!3" Based on the information we have gathered and our resulting research, we feel

that #5 %T6(% has the probability to 629#*: ;)T%* average marketperformance for the ne<t year" The company e<hibits )TT6)%T(1 %ompany Si=e but95)TT6)%T(1 Book ;arket 6atio"

.ead our 1omplete etailed Valuation .eport on 'eneral Electric H0;0 

8/20/2019 ValuEngine Weekly: Transportation Stocks, General Electric, Sears Earnings, and ValuEngine Capital

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Valu0n&%ne 3orecast

 Target

Price*

Execte!

Return

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Valuat%on < ;ank%n&s

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")#$ Return "%'+ $o7entu7 Ran2  345  @!

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/#0 9vg 9nnual Return ")'(/ /#0 9vg 9nnual Rtn Ran2    @71olatility "-'./ 1olatility Ran2345  A8

Execte! EP8 :rowth %'.+ EP8 :rowth Ran2345  7>

$ar2et Ca 3billions5 %&)'&) 8i;e Ran2    !!

Trailing P<E Ratio )&'+ Trailing P<E Ran2345  8?

6orwar! P<E Ratio "-'(. 6orwar! P<E Ratio Ran2    7>

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$ar2et<=oo2 .'(/ $ar2et<=oo2 Ran2  345  A

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W(at)! *ot++Sear! o!t! oor Re!-lt!Sears *oldings %orporation &S*4', the parent of Cmart and Sears, 6oebuck

and %o", is the leading home appliance retailer in 5orth )merica and is a retail sales

leader in tools, lawn and garden, home electronics, and automotive repair andmaintenance" Cey proprietary brands include Cenmore, %raftsman and 4ie*ard, anda broad apparel offering, including such well-known labels as ands nd, Daclyn

Smith and Doe Bo<er, as well as the )postrophe and %ovington brands"

:esterday, Sears reported E3 earnings results for 7!8 and they were not good"

Sears reported a loss of $8 million, or $"7? a share, compared with a loss of $8@million, or $8"8, a year earlier" )d.usted for significant items, Sears would have

8/20/2019 ValuEngine Weekly: Transportation Stocks, General Electric, Sears Earnings, and ValuEngine Capital

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reported a net loss attributable to *oldings shareholders of $3!8 million &$7"@? loss perdiluted share' for the uarter compared to a net loss attributable to *oldingsshareholders of $7@@ million &$7"A loss per diluted share' in the prior year uarter"

Cmart and Sears 4omestic comparable store sales declined A"8F and >"?F,respectively, in the third uarter of 7!8 with more than half of the decline coming

from declines in apparel and consumer electronics" 6evenues decreasedappro<imately $"8 billion to $8"@ billion for the uarter ended 2ctober 3, 7!8,compared to revenues of $A"7 billion for the uarter ended 5ovember , 7!"

dward S" ampert, *oldings %hairman and %hief <ecutive 2fficer, said

Ge remain focused on restoring Sears *oldings to profitability by

concentrating on our best stores, rewarding our best members and pursuingour best categories through innovative solutions to product and serviceofferings" Through deliberate strategic actions, notably with respect to our

promotional design and marketing spend, we have made meaningfulprogress in our transformation and reported a fifth consecutive uarter ofimproved year-over-year results" )s e<pected, the results of these actions

have led to comparable store sales declines despite an increase inprofitability" )t the same time, we recogni=e a lot of work remains and wehave brought in a number of e<perienced leaders to drive our business

forward with a plan to win as a member-centric integrated retailer" )s wehead into the fourth uarter, we have intensified our focus on our productofferings and promotions in order to enhance member engagement and

provide our members with the best e<perience possible throughout the

holiday shopping season"

Ge have been down on this stock for a very long time" 0or the most part, wehave had it ranked a S or ST625# S since Danuary, 7!" (ts tough to get a

sense of what this means for retail in general given the fact that Sears has been introuble for a very long time now" They have been unable to make the transitionnecessary to compete with the )ma=ons and Targets and Gal-;arts of the world and

it is tough to figure out why customers would seek them out"

They have yet to recover from the self-inflicted disaster caused by the reign of

%2 and hedge-fund guru ampert" Since ampert took over in 7!!8, the trend isclear, and it is not pretty" So, we find little here to use as an evaluation of thebroaderretail sector, the 9S economy in general, consumer confidence and

spending, the overall holiday shopping potential, etc"

8/20/2019 ValuEngine Weekly: Transportation Stocks, General Electric, Sears Earnings, and ValuEngine Capital

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(f anything, we think is yet another case of a so-called financial HgeniusH gettingin over his head and attempting to apply ideological solutions some place they dontbelong--and wrecking a storied company in the process" ike D%Ienney, this

company is struggling, and we dont see the end game or the recovery coming

anytime soon"

1alungine continues its ST625# S recommendation on S)6S *4# %I for7!8-7-!3" Based on the information we have gathered and our resulting research,we feel that S)6S *4# %I has the probability to 9546I6026; average market

performance for the ne<t year" The company e<hibits 95)TT6)%T(1 I/ 6atio andarnings #rowth 6ate"

Val-E.#e Ca"#tal

Ge are pleased to announce the formation of 1alungine %apital, a registeredinvestment advisory firm that will offer clients investment-management services based

on industry-leading 1alungine research" 1alungine %apital melds the cutting-edgefinancial theory of 1alungines award-winning uantitative independent researchwith the best real-world Gall St" practices" 1alungine %apital offers refined

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Ge will initially be offering two investment strategies to clients, the 1alungine1iew Strategy and the 1alungine ;arket 5eutral StrategyJ

1alungine 1iew StrategyJ The 1alungine 1iew Strategy is the product of asophisticated stock valuation model that was first developed by

1alungines academic research team" (t utili=es a three factor approachJfundamental variables such as a companys trailing 7-month arnings-Ier-Share &IS', the analyst consensus estimate of the companys future 7-

month IS, and the 3!-year Treasury yield are all used to create a moreaccurate reflection of a companys fair value" ) total of eleven additional

firm specific variables are also used" The 1alungine 1iew Strategy isconstructed by integrating this model along with some basic rules formarket capitali=ation and industry diversification" The portfolio has 8 stocksand is rebalanced once each month"

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1alungine ;arket 5eutral StrategyJ The 1alungine ;arket 5eutralStrategy is the product of 1alungines 0orecast ;odel" This model wasdeveloped by a team of Ih4s and is based on the cutting edge economic

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