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November 12, 2014


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VALUATION WATCH: Overvalued stocks now make up 61.36% of our stocks assigned a valuation and 21.75% of those equities are calculated to be overvalued by 20% or more.  Fourteen sectors are calculated to be overvalued--three by double digits.

Tis the Season

--Wal-Mart Plans Changes for Holiday Shopping

Wal-Mart Stores, Inc. (WMT) is the world's largest retailer. They are engaged in the operation of mass merchandising stores, which serve their customers primarily through the operation of three segments, which are the Wal-Mart Stores segment, the SAM'S Club segment and the International segment.

While the Wal-Mart juggernaut is certainly stronger than most retailers throughout the year, like them all it makes a lot of effort during the holiday season to bolster the bottom line. Long a scene of Black Friday excess, with shoppers and employees often trampled in a rush for the season's best deals, Wal-Mart has announced plans to extend the madness over a much longer period of time.

The Wall Street Journal reported today that the retail behemoth plans a five-day long series of sales to boost to boost its bottom line and reclaim lost markets. This is an attempt to provide more flexibility for shoppers who may eschew camping in a parking lot on Black Friday or rousing themselves from a Turkey-coma on Thanksgiving night in search of the cheapest possible Xbox One.

The company claims it will spread different sales over different days both online and in its brick and mortar locations. The sale period will encompass Thanksgiving Day, Black Friday, the weekend, and Cyber-Monday. The company hopes that the new holiday sales program will win back business from cheaper competitors like dollar stores as well as the internet.

Wal-Mart has suffered from declining store traffic for almost two years now, and our models have certainly noticed. It will be interesting to see if the company can return to its former glory with the new extended series of sales. For now, ValuEngine continues its HOLD recommendation on WAL-MART STORES for 2014-11-11. Based on the information we have gathered and our resulting research, we feel that WAL-MART STORES has the probability to ROUGHLY MATCH average market performance for the next year. The company exhibits ATTRACTIVE Company Size but UNATTRACTIVE Earnings Growth Rate.

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 Wal-Mart HERE.

 

Below is today's data on WMT:


ValuEngine Forecast
 
Target
Price*
Expected
Return
1-Month
79.01 -0.00%
3-Month
79.04 0.04%
6-Month
78.77 -0.31%
1-Year
78.98 -0.04%
2-Year
79.18 0.22%
3-Year
76.36 -3.35%

Valuation & Rankings
Valuation
10.29% overvalued
Valuation Rank(?)
40
1-M Forecast Return
-0.00%
1-M Forecast Return Rank
50
12-M Return
0.00%
Momentum Rank(?)
48
Sharpe Ratio
0.59
Sharpe Ratio Rank(?)
81
5-Y Avg Annual Return
8.57%
5-Y Avg Annual Rtn Rank
65
Volatility
14.42%
Volatility Rank(?)
92
Expected EPS Growth
1.38%
EPS Growth Rank(?)
20
Market Cap (billions)
254.70
Size Rank
100
Trailing P/E Ratio
15.61
Trailing P/E Rank(?)
76
Forward P/E Ratio
15.40
Forward P/E Ratio Rank
54
PEG Ratio
11.29
PEG Ratio Rank
3
Price/Sales
0.53
Price/Sales Rank(?)
82
Market/Book
4.04
Market/Book Rank(?)
30
Beta
0.47
Beta Rank
79
Alpha
-0.07
Alpha Rank
53

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We still find a positive economic environment for equities within the United States. As we noted a few weeks ago-- when the market was in a sell off mode, most of the doom and gloom seemed to be emanating from political and media sources looking to capitalize on the slight wobble for electoral purposes.

Now, it is worthwhile to note that many of those same "analysts" claim the ongoing rebound is due to the US election results. But we believe that we are seeing not the short-term noise of a mid-term election, but rather the continuation of favorable long-term economic trends within the US that are --finally--being bolstered by an improved employment situation. We hope that nothing from a new GOP-dominated Congress--such as a return to harsh austerity policies favored by the American right wing--will negatively impact the overall upward trajectory of the US economy.

We remind investors once more than mixing politics and investing is a very bad idea. Relying on blatantly political sources for economic analysis and advice is a quick path to a poorly performing portfolio. Whenever you hear an analyst, pundit, or other talking head of any ideological predilection attribute market moves to election results--or the daily ebb and flow of life in Washington DC, it's time to hold on to that wallet/purse.

Consider the market since January 2009--DOW up 94%, SP500 up 118%, NASDAQ up 183%--Anyone who listened to the "BUY GOLD BUY GUNS BUY SEEDS" crowd after the election of 2008 missed out on an epic rally.

In any case, with favorable markets we find that once more our top-performing newsletter portfolio, the ValuEngine View, has bounced back wonderfully and has returned to its winning ways. More than half of our positions are currently at --or close to-- double-digit returns.

Looking for a monthly portfolio of stock picks which are objective and based on cutting-edge academic theory and Wall St.practice? Then subscribe to The ValuEngine View Newsletter.The ValuEngine View Portfolio is based on our highly-refined and tested ValuEngine Portfolio Strategies along with our proprietary quant-based composite scoring system. The ValuEngine View Newsletter is the product of sophisticated stock valuation and forecast models first developed by Yale Professor of Finance Zhiwu Chen.

Here are the current VE View Newsletter Portfolio Results (Thursday's Close):

Ticker 
Company Name 
Entry Price 10/22/14
Exit Price
Change
%Change
AER
AERCAP HOLDINGS
40.38
44.67
4.29
10.62
AFSI
AMTRUST FINANCIAL SERVICES
49.95
51.49
1.54
3.08
ATK
ALLIANT TECHSYSTEMS
130.06
108.86
-21.2
-16.30
AUO
AU OPTRONICS-ADR
4
4.84
0.84
21.00
BT
BT GROUP PLC-ADR
59.92
59.42
-0.5
-0.83
GMT
GATX CORP
58.32
63.68
5.36
9.19
GPRE
GREEN PLAINS
31.91
34.64
2.73
8.56
HII
HUNTINGTON INGALLS
96.84
104.96
8.12
8.38
LCI
LANNETT INC
44.96
53.15
8.19
18.22
LYB
LYONDELLBASEL-A
95.19
85.25
-9.94
-10.44
MU
MICRON TECHNOLOGY
31.19
33.71
2.52
8.08
ONNN
ON SEMICONDUCTOR CORP
7.79
8.21
0.42
5.39
PJC
PIPER JAFFRAY
48.78
57.62
8.84
18.12
SAFM
SANDERSON FARMS
80.89
86.27
5.38
6.65
WLK
WESTLAKE CHEMICAL
76.79
67.33
-9.46
-12.32
 
VE VIEW PORTFOLIO
     
5.16
GSPC
S&P500
1941.28
2023.57
82.29
4.24

The ValuEngine View Newsletter is the product of a sophisticated stock valuation model that was first developed by ValuEngine's academic research team. It utilizes a three factor approach: fundamental variables such as a company's trailing 12-month Earnings-Per-Share (EPS), the analyst consensus estimate of the company's future 12-month EPS, and the 30-year Treasury yield are all used to create a more accurate reflection of a company's fair value. A total of eleven additional firm specific variables are also used. In addition, the portoflio uses top picks from our Forecast Model. In essence, the portfolio is constructed with the best picks from our main propiretary models

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.

Please click HERE to subscribe. You may download a sample copy HERE. After your subscription is approved, you will immediately receive access to download the current issue of newsletter as well as the previous issues, which are all available as PDF files. Each month when the latest issue of the newsletter is released, we will send you an email, informing you to download it from the site. The newsletter is released near the middle of each month.

 

  VE View vs. S&P 500 Index Past Five Years
VE View
S&P 500
Ann Return
23.13% 13.25%
Ann Volatility
22.30% 12.20%
Sharpe Ratio
1.04 1.09
Sortino Ratio
1.78 1.39
Max Drawdown
-34.94% -11.14%

  The ValuEngine View Newsletter is derived from the ValuEngine Aggressive and Diversified Growth BenchmarkPortfolio Strategies. These strategies are the product of ValuEngine's academic research team and combine cutting-edge financial analysis and portfolio construction techniques with real-world Wall St. know how. 

CLICK HERE to Subscribe to the ValuEngine View

The ValuEngine View Newsletter portfolio has 15 primary stock picks and five alternates and is re-balanced once each month. The ValuEngine View Newsletter is published near the middle of each calendar month. An equal amount of capital is allocated to each stock. The monthly returns are calculated from the closing prices on date of publication. The performance calculation does not include any transaction costs.

 

 

ValuEngine Market Overview

Summary of VE Stock Universe
Stocks Undervalued
38.64%
Stocks Overvalued
61.36%
Stocks Undervalued by 20%
15.14%
Stocks Overvalued by 20%
21.76%

ValuEngine Sector Overview

Sector
Change
MTD
YTD
Valuation
Last 12-MReturn
P/E Ratio
-0.31%
0.03%
3.23%
13.31% overvalued
9.71%
23.67
-0.32%
-0.23%
-0.10%
11.07% overvalued
7.13%
17.55
-0.19%
0.60%
-2.99%
10.13% overvalued
-0.60%
25.05
-0.09%
0.39%
5.01%
9.78% overvalued
7.01%
17.50
0.15%
-1.03%
13.37%
9.66% overvalued
16.25%
29.61
-0.26%
0.30%
3.39%
9.27% overvalued
7.20%
30.68
-0.83%
-0.44%
-0.44%
9.13% overvalued
12.31%
21.04
-0.05%
0.10%
8.23%
9.08% overvalued
9.41%
22.93
-0.05%
1.78%
10.76%
7.87% overvalued
11.76%
20.92
0.26%
0.97%
-1.63%
7.13% overvalued
1.99%
26.61
-0.15%
0.60%
3.39%
5.80% overvalued
6.99%
26.01
-0.07%
-0.43%
-1.82%
3.65% overvalued
1.19%
21.04
0.38%
0.36%
-1.89%
2.35% overvalued
3.88%
16.87
0.02%
1.23%
0.08%
1.78% overvalued
3.38%
26.44
-0.24%
-1.85%
2.90%
6.08% undervalued
-8.09%
23.96
0.70%
1.03%
-3.21%
7.58% undervalued
-9.34%
24.53

 

 

 

 

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