October 24, 2014

The ValuEngine Weekly is an Investor Education newsletter focused on the quantitative approach to investing and the tools available from ValuEngine.com. In today's fast-moving and globalized financial markets, it is easy to get overloaded with information. The winners will adopt an objective, scientific, independent and unemotional approach to investing. If you are not yet a member of ValuEngine's stock analysis service, sign up now for a free trial at www.valuengine.com!

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Our Valuation WARNING is OFF: Valuation is now well within "normal" range. Overvalued stocks now make up 52.21% of our stocks assigned a valuation and 15.09% of those equities are calculated to be overvalued by 20% or more. Ten sectors are calculated to be overvalued.

ValuEngine Index Overview

Index	Week Open	Friday PM	Change	% Change	YTD
DJIA	16373.15	16773.3	400.15	2.44%	-1.21%
NASDAQ	4254.16	4472.16	218	5.12%	2.62%
RUSSELL 2000	1078.68	1113.66	34.98	3.24%	-6.14%
S&P 500	1885.62	1961.26	75.64	4.01%	2.45%

ValuEngine Market Overview

Summary of VE Stock Universe
Stocks Undervalued	47.79%
Stocks Overvalued	52.21%
Stocks Undervalued by 20%	17.29%
Stocks Overvalued by 20%	15.09%

ValuEngine Sector Overview

Sector	Change	MTD	YTD	Valuation	Last 12-MReturn	P/E Ratio
Consumer Staples	0.54%	0.57%	0.41%	5.57% overvalued	4.31%	22.81
Multi-Sector Conglomerates	1.36%	-1.22%	-1.54%	4.49% overvalued	-1.17%	20.91
Medical	1.26%	1.27%	10.07%	3.95% overvalued	11.69%	29.47
Retail-Wholesale	1.29%	0.74%	-6.02%	3.80% overvalued	-4.51%	23.33
Utilities	0.74%	0.60%	5.87%	3.55% overvalued	3.11%	21.00
Finance	0.51%	0.34%	2.13%	3.48% overvalued	2.28%	17.22
Consumer Discretionary	0.81%	-0.50%	-5.26%	3.48% overvalued	-2.28%	26.69
Transportation	1.46%	-0.41%	4.94%	2.97% overvalued	9.24%	18.82
Aerospace	1.45%	-2.64%	-3.74%	1.69% overvalued	10.54%	20.34
Computer and Technology	1.31%	-3.06%	-0.54%	0.28% overvalued	-0.93%	29.92
Business Services	0.93%	1.00%	-0.93%	0.57% undervalued	1.75%	24.06
Industrial Products	1.07%	-0.82%	-4.82%	3.28% undervalued	-0.56%	21.66
Auto-Tires-Trucks	1.15%	-3.17%	-4.54%	4.61% undervalued	-6.32%	15.53
Construction	0.62%	0.65%	-3.39%	7.44% undervalued	-1.75%	23.57
Basic Materials	0.56%	-3.24%	-3.79%	11.14% undervalued	-10.68%	24.52
Oils-Energy	1.21%	-8.60%	4.83%	11.17% undervalued	-10.07%	23.30

ValuEngine Newsletters Latest Results

VE Newsletter	Current Results	S&P 500	Last Month Total	S&P 500	Since Inception	S&P 500
Forecast MNS	-2.26	1.98	4.46	-5.36	105.54	88.57
Dividend Stock	2.32	-2.18	-4.71	-0.18	22.73	25.67
Small Cap Stock	-5.93	-4.19	-2.36	1.25	21.99	38.95
View	-0.78	-0.73	-6.26	-2.89	114.77	71.42

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Free Download for Readers

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3M Company (MMM) is a diversified technology company with leading positions in consumer and office; display and graphics; electronics and telecommunications; health care; industrial; safety, security and protection services; transportation and other businesses. They are an integrated enterprise characterized by substantial intercompany cooperation in research, manufacturing and marketing of products.

3M is another earnings week success story. The company posted excellent numbers yesterday and provided a nice beat with Q3 profits up almost six percent. CEO Inge Thulin noted that much of the good news was based on US sales, where a strong economy helped product lines related to auto, aircraft, and electronic manufacturing. She also noted a boost from the sale of the company's protective dust and respiratory masks.

Despite the good news, ValuEngine continues its HOLD recommendation on 3M CO for 2014-10-23. Based on the information we have gathered and our resulting research, we feel that 3M CO has the probability to ROUGHLY MATCH average market performance for the next year. The company exhibits ATTRACTIVE Company Size but UNATTRACTIVE Book Market Ratio. Of course, as analysts update their earnings estimates to reflect the latest news, this rating could change.

Below is today's data on MMM:

ValuEngine Forecast
	Target Price*	Expected Return
1-Month	144.64	-0.28%
3-Month	144.09	-0.66%
6-Month	144.13	-0.64%
1-Year	140.10	-3.42%
2-Year	157.53	8.60%
3-Year	117.49	-19.00%

Valuation & Rankings
Valuation	17.21% overvalued	Valuation Rank(?)	19
1-M Forecast Return	-0.28%	1-M Forecast Return Rank	29
12-M Return	17.74%	Momentum Rank(?)	78
Sharpe Ratio	0.76	Sharpe Ratio Rank(?)	89
5-Y Avg Annual Return	13.04%	5-Y Avg Annual Rtn Rank	77
Volatility	17.24%	Volatility Rank(?)	87
Expected EPS Growth	9.07%	EPS Growth Rank(?)	32
Market Cap (billions)	94.90	Size Rank	100
Trailing P/E Ratio	19.92	Trailing P/E Rank(?)	57
Forward P/E Ratio	18.27	Forward P/E Ratio Rank	33
PEG Ratio	2.20	PEG Ratio Rank	15
Price/Sales	3.02	Price/Sales Rank(?)	31
Market/Book	10.76	Market/Book Rank(?)	11
Beta	1.11	Beta Rank	46
Alpha	-0.01	Alpha Rank	65

As a bonus to our Newsletter readers,
we are offering a FREE DOWNLOAD of one of our Stock Reports

Read our Complete Detailed Valuation Report on 3M HERE.

Sector Talk--Construction

Below, we present the latest data on Construction stocks from our Institutional software package (VEI). Top five lists are provided for each category. We applied some basic liquidity criteria--share price greater than $3 and average daily volume in excess of 100k shares.

Please Click Here to Download a FREE Demo of ValuEngine's Professional VEI Software Package.

Top-Five Construction Stocks--Short-Term Forecast Returns

Ticker	Name	Mkt Price	Valuation(%)	Last 12-M Retn(%)
MHO	M/I HOMES INC	21.92	-34.04	8.25
EME	EMCOR GROUP INC	41.9	-17.21	5.07
WLH	WILLIAM LYON HM	24.1	N/A	1.73
CBI	CHICAGO BRIDGE	51.28	-35.77	-30.31
PWR	QUANTA SERVICES	32.47	-12.56	11.27

Top-Five Construction Stocks--Long-Term Forecast Returns

Ticker	Name	Mkt Price	Valuation(%)	Last 12-M Retn(%)
MHO	M/I HOMES INC	21.92	-34.04	8.25
EME	EMCOR GROUP INC	41.9	-17.21	5.07
WLH	WILLIAM LYON HM	24.1	N/A	1.73
CBI	CHICAGO BRIDGE	51.28	-35.77	-30.31
PWR	QUANTA SERVICES	32.47	-12.56	11.27

Top-Five Construction Stocks--Composite Score

Ticker	Name	Mkt Price	Valuation(%)	Last 12-M Retn(%)
DHI	D R HORTON INC	22.94	-3.13	17.82
PWR	QUANTA SERVICES	32.47	-12.56	11.27
LEN	LENNAR CORP -A	43.31	-5.32	18.5
MHO	M/I HOMES INC	21.92	-34.04	8.25
EME	EMCOR GROUP INC	41.9	-17.21	5.07

Top-Five Construction Stocks--Most Overvalued

Ticker	Name	Mkt Price	Valuation(%)	Last 12-M Retn(%)
WLDN	WILLDAN GROUP	13.41	99.64	265.4
AYI	ACUITY BRANDS	133.54	26.72	29.02
URS	URS CORP	54.2	24.57	-0.37
NCS	NCI BLDG SYSTEM	19.26	23.24	36.31
ACM	AECOM TECH CORP	31.97	14.28	-0.71

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What's Hot
-- VE Dividend Strategy Posts Positive Gains Despite Roiled Markets

We still find a positive economic environment for equities within the United States. However, concern over a global economic slow down combined with overblown concerns about Ebola and ISIS within the US-- and efforts by some politicians and media figures dissatisfied with the Obama Administration to stoke those fears amongst investors prior to the US mid-term elections-- is not helping equities. As the latest results for our VE Dividend Stock Newsletter Portfolio show, we definitely saw a move into larger cap/defensive stocks over the past few weeks.

For September/October, we saw the return of volatility and a roller coaster market. Our portfolio however, performed admirably well as investor rediscovered the strength and safety of large-cap/dividend paying stocks. We handily beat the S&P 500s loss of 2.18% by a significant margin and posted a gain of 2.32%. That's a nice spread of 450 bps. The LTM return of our portfolio is 10.39% vs the S&P 500 LTM return of 11.18%. Since inception, the return for the VE Dividend Stock Newsletter is 22.73% versus the S&P's gain of 25.67%.

We had a 66% hit rate for the month with losers—with the exception of Potash Saskatchewan-- posting declines of less than 5%. Our winners also posted fairly modest gains, with only Alexandria Real Estate breaking into double-digit territory. Still, it was nice to see some good news amidst the carnage that occurred around the middle of the rebalance period.

Here are the latest VE Dividend Stock Newsletter Portfolio Results:

Ticker	Company Name	Entry Price 9/23/14	Exit Price	Change	%Change
ARE	ALEXANDRIA REAL ESTATE	73.66	82.52	8.86	12.03
BGS	B&G FOODS CL-A	27.95	27.94	-0.01	-0.04
BMR	BIOMED REALTY TRUST	20.33	21.85	1.52	7.48
BRC	BRADY CORPORATION	22.56	22.01	-0.55	-2.44
CBL	CBL&ASSOCIATES PROPERTIES	17.95	18.71	0.76	4.23
CMO	CAPSTEAD MORTGAGE	12.55	12.82	0.27	2.15
MAA	MID-AMERICAN APT CM	65.72	70.07	4.35	6.62
MFA	MFA FINANCIAL	7.88	8.31	0.43	5.46
PCG	PG&E CORP	44.73	46.19	1.46	3.26
POT	POTASH SASKATCHEWAN	34.52	32.54	-1.98	-5.74
PSEC	PROSPECT CAPITAL	9.98	9.64	-0.34	-3.41
SRC	SPIRIT REALTY TRUST	10.97	11.64	0.67	6.11
STWD	STARWOOD PROPERTY TRUST	22.3	22.36	0.06	0.27
TWO	TWO HARBORS INVESTMENT	9.95	10.11	0.16	1.61
VZ	VERIZON COMMUNCIATIONS	49.62	48.22	-1.4	-2.82
	LONG PORTFOLIO				2.32
GSPC	S&P500	1994.29	1950.82	-43.47	-2.18

Want To Know More About Our Dividend Stock Newsletter?

The ValuEngine Dividend Stock Newsletter features 15 primary stock selection and five alternate stock picks derived from our award-winning stock forecast model. Stocks selected are the top forecast dividend-paying stocks for the next thirty days. Equities selected will pay dividends during the re-balance period which over time can help to boost portfolio performance.

Why Dividend Stocks? Dividend stocks allow investors to build a portfolio with large, stable, and profitable companies. The VE Dividend Stock Newsletter is designed to provide investors with satisfactory returns, low volatility, low trading costs, and the relative security of large cap stock investing along with the performance boost provided by capturing monthly, quarterly, and annual dividends.

Each month you will receive an electronic copy of our newsletter highlighting 15 potential long positions along with five alternate picks. Our investment strategies focus on dozens of fundamental and technical factors for over 8000 individual stocks, synthesize the data, and then come up with a portfolio. Each newsletter portfolio focuses on maximum potential returns so there are no diversity requirements. Each portfolio pick includes critical ValuEngine valuation and forecast data. These 20 total picks represent the most up-to-date equity assessments of our proprietary models.

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