December 20, 2013

VALUATION WARNING: Our models find that overvaluation is at levels typically seen when market pullbacks occur. Overvalued stocks now make up almost 84% of our stocks assigned a valuation and almost 54% of those equities are calculated to be overvalued by 20% or more. ALL sectors are again calculated to be overvalued--15 of them by double digits.

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 Best Buy operates in a single business segment, selling personal computers and other home office products, consumer electronics, entertainment software, major appliances and related accessories principally through its retail stores. They operate retail stores and commercial Websites under the brand names Best Buy, Media Play, On Cue, Sam Goody, Suncoast, Magnolia Hi-Fi and Future Shop. They also operate in three segments: Best Buy, Musicland and International.

 ValuEngine continues its BUY recommendation on BEST BUY for 2013-12-19. Based on the information we have gathered and our resulting research, we feel that BEST BUY has the probability to OUTPERFORM average market performance for the next year. The company exhibits ATTRACTIVE Momentum and Company Size.

Read our Detailed Valuation Report, a $25 value, for FREE HERE.

Sector Talk--Retail/Wholesale

  Below, we present the latest data on Retail/Wholesale 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 Retail/Wholesale Stocks--Short-Term Forecast Returns

Top-Five Retail/Wholesale Stocks--Long-Term Forecast Returns

Top-Five Retail/Wholesale Stocks--Composite Score

Top-Five Retail/Wholesale Stocks--Most Overvalued

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What's Hot
--VE Web Log (BLOG) Consolidates Content

We have added a blog to the VE Website. This new section consolidates all of our free content in one easily accessible location. Of special note is the work of our Chief Market Strategist Richard Suttmeier. Suttmeier, a prolific market analyst and commnetator, writes for forbes, thestreet.com, and many other investor websites. Check out our new blog page for one-stop access to all of his work as well as other bulletins and analysis based on ValUEngine's award-winning stock valuation and forecast services.

Check out our new blog page HERE

--VE View Continues Domination of Benchmark

For November/December, the stock market suffered from some doldrums and volatility. Thankfully our portfolio still performed as expected and posted a gain of 3.52% vs. the S&P 500 more modest return of 1.27%. We beat the benchmark by 224 bps. The trailing 12 month gain of the VE View is 47.98% versus the S&P 500 return of 25.58%. The return since inception of the View is 96.63% versus the S&P's gain of 59.89%.

Ten of our fifteen picks were winners. That is a 66% hit ratio. However, we only saw four double-digit gainers this month. Green Mountain Coffee has returned to its winning ways and pushed us along with a gain in excess of 20% with Fortress Investments, Generac, and Hewlett Packard also returning 10% or more. The significant losers were ITT Educational and Questcor Pharma.

We still see a positive environment for the economy and the stock market. The only blot on the horizon causing concern remains--as usual--the US political stand off and the impending budget deal. It seems that the GOP is eager to avoid another shut down fiasco but only time will tell. The market also dodged a bullet yesterday when outgoing Fed Chairman Ben Bernanke announced only a modest “taper” for the QE program. Backing off $10 billion out of a total current support level of $85 billion will support stocks into the future. And, Bernanke suggested yet another extension of the ZIRP. Positive reactions to Fed actions provided yesterday's nice bump.

Here are the results for November-December 2013:

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.

  The ValuEngine View Newsletter is derived from the ValuEngine Aggressive and Diversified Growth Benchmark Portfolio 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. 

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.

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Suttmeier Says
--Commentary and Analysis from Chief Market Strategist Richard Suttmeier

If you have any comments or questions, send them to Rsuttmeier@Gmail.com 

Treasury Yields

10-Year--(2.933) Monthly and semiannual value levels are 3.117 and 3.227 with daily and weekly pivots at 2.901 and 2.896 and annual and quarterly risky levels at 2.476 and 2.252.

Commodities and Forex

Comex Gold –($1189.4) My monthly value level is $1062.1 with daily and weekly pivots at $1214.9 and $1225.7 and quarterly and annual risky levels at $1435.6, $1599.9 and $1852.1.

Nymex Crude Oil – ($98.70) My weekly value level is $90.03 with daily and monthly pivots at $98.08
and $98.21 and semiannual, quarterly and annual risky levels at $109.84, $114.36 and $115.23.

The Euro – (1.3655) Weekly, annual, quarterly and semiannual value levels are 1.3530, 1.3257,
1.2805, 1.2756 and 1.2477 with daily, monthly and annual risky levels at 1.3722, 1.3840 and 1.4295.

Major Indices

Daily Dow: (16,179) Daily, semiannual and annual value levels are 15,885, 14,724 and 12,696 with a
monthly pivot at 16,093, the Dec. 19 all-time intra-day high at 16,194.73, and weekly, semiannual and
quarterly risky levels at 16,287, 16,490 and 16,775.

S&P 500 – (1809.6) Daily, semiannual and annual value levels are 1776.7, 1743.5 and 1348.3 with a
monthly pivot at 1810.2, the Nov. 29 all-time intra-day high at 1813.55, and weekly and quarterly risky
levels at 1823.4 and 1853.8.

NASDAQ – (4058) Daily, semiannual and annual value levels are 3999, 3759, 3668 and 2806 with
quarterly and weekly pivots at 4025 and 4061, the Dec. 9 multi-year intra-day high at 4081.78, and
monthly risky level at 4114.

NASDAQ 100 (NDX) – (3499) Daily, semiannual and annual value levels are 3451, 3304 and 2463 with
quarterly and weekly pivots at 3477 and 3508, my monthly risky level at 3518, and the Dec. 9 multiyear
intra-day high at 3524.00.

Dow Transports – (7206) Daily, monthly and annual value levels are 7056, 6941, 5925 and 5469 with
semiannual and quarterly pivots at 7104 and 7205, the Dec. 2 all-time intra-day high at 7304.49, and a
weekly risky level at 7413.

Russell 2000 – (1125.45) Daily, semiannual and annual value levels are 1104.91, 1089.42, 860.25 and
809.54 with weekly and monthly pivots at 1116.90 and 1143.82, the Nov. 29 all time intra-day high at
1147.00, and quarterly risky level at 1163.21.

The SOX – (517.78) Daily, weekly and annual value levels are 510.49, 505.37 and 338.03 with a
quarterly pivot at 514.87, the Dec. 18 multi-year intra-day high at 521.19, and monthly and semiannual
risky levels at 526.74 and 533.56.

Dow Utilities: (483.74) Daily, monthly and semiannual pivots are 475.23, 479.08 and 481.92 with
weekly, quarterly, semiannual and annual risky levels at 492.60, 520.55, 523.33 and 540.37.

Stock of the Day

  One of the more popular features of Richard Suttmeier's Morning Briefing for investors is his stock of the day.  In every issue, Suttmeier highlights one stock and provides VE data as well as his own proprietary technical data. 

Here is today's stock of the day from Richard Suttmeier's Morning Briefing Newsletter.

Alcoa (AA) – ($9.97) Alcoa Inc. is the world's leading producer and manager of primary aluminum, fabricated aluminum and alumina facilities, and is active in all major aspects of the industry. Alcoa serves the aerospace, automotive, packaging, building and construction, commercial transportation and industrial markets, bringing design, engineering, production and other capabilities of Alcoa's businesses to customers. In addition to aluminum products and components, Alcoa also markets consumer brands including Reynolds Wrap foils and plastic wraps, Alcoa wheels, and Baco household wraps. Among its other businesses are closures, fastening systems, precision castings, and electrical distribution systems for cars and trucks.

Analysis –Alcoa has been downgraded to sell from hold according to ValuEngine and is 27.1% overvalued with fair value at $7.74 and a one-year price target at $9.24. The daily chart shows rising momentum with the stock above its 21-day, 50-day and 200-day simple moving averages at $9.49, $9.23 and $8.47.

   

Richard Suttmeier, Chief Market Strategist at ValuEngine.com & Contributor to TheStreet.com
Richard Suttmeier has been a professional in the US Capital Markets since 1972 transferring his engineering skills to the trading and investment world. He earned a Bachelor of Industrial Engineering degree from Georgia Institute of Technology in 1966, and a Master of Science, Operations Research, Systems Analysis degree from Brooklyn Polytechnic University in 1970. Over the years Richard appeared many times in the financial media, on networks such as CNBC, CNN, CNNfn, New York 1, Bloomberg TV and radio, Fox Business, Business News Network in Canada, Wall Street Week with Fortune, Yahoo Finance Breakout, and the Bill Mazer Radio Show. In 2002, he anchored his own show on Yahoo Finance Vision called, "Traders' Club with Richard Suttmeier." Richard has been frequently quoted in USA Today, The NY Times, Wall Street Journal, Reuters, and The Dow Jones Newswires. Richard has made numerous speaking appearances in recent years to groups such as the Market Technicians Associations, the American Association of Individual Investors, Wells Fargo Advisors, the Executive Forum at the National Arts Club, and the Investors Roundtable of Wilmington NC.

Now YOU can take advantage of the same market and trading expertise as the financial media with Richard Suttmeier's ValuTrader Model Portfolio

 The ValuTrader Portfolio Newsletter is based on ValuEngine Chief Market Strategist Richard Suttmeier's proprietary market analytics. Suttmeier combines his technical analysis expertise with ValuEngine's proprietary valuation, forecast, and ratings data for more than 4000 equities trading on US markets to come up with a 20 stock portfolio tailored to current market conditions. With ValuTrader, subscribers access Suttmeier's "Buy and Trade" strategy with a portfolio designed to function well in both up and down markets.

 

With Richard Suttmeier's Morning Briefing, you get daily analysis of US Treasury Yields, Gold, Crude Oil, and Currency Exchange Rates--Dollar, Yen, Pound, and Euro--as well as key technical indicators for the major equity averages.

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