February 6, 2015

Valuation Watch: Overvalued stocks now make up 50.49% of our stocks assigned a valuation and 14.26% of those equities are calculated to be overvalued by 20% or more.  Seven sectors are calculated to be overvalued--with one at or near double digits.

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AT&T Inc. (T) is a premier communications holding company. Its subsidiaries and affiliates, AT&T operating companies, are the providers of AT&T services in the United States and around the world. Among their offerings are the world's most advanced IP-based business communications services, the nation's fastest 3G network and the best wireless coverage worldwide, and the nation's leading high speed Internet access and voice services. In domestic markets, AT&T is known for the directory publishing and advertising sales leadership of its Yellow Pages and YELLOWPAGES.COM organizations, and the AT&T brand is licensed to innovators in such fields as communications equipment. As part of their three-screen integration strategy, AT&T operating companies are expanding their TV entertainment offerings.

ValuEngine continues its BUY recommendation on AT&T INC for 2015-02-05. Based on the information we have gathered and our resulting research, we feel that AT&T INC has the probability to OUTPERFORM average market performance for the next year. The company exhibits ATTRACTIVE Company Size and Volatility.

Below is today's data on AT & T:

ValuEngine Forecast
	Target Price*	Expected Return
1-Month	34.76	0.64%
3-Month	35.30	2.21%
6-Month	36.02	4.28%
1-Year	37.17	7.62%
2-Year	35.90	3.92%
3-Year	32.51	-5.88%

Valuation & Rankings
Valuation	4.85% undervalued	Valuation Rank(?)	61
1-M Forecast Return	0.64%	1-M Forecast Return Rank	90
12-M Return	7.67%	Momentum Rank(?)	60
Sharpe Ratio	0.38	Sharpe Ratio Rank(?)	72
5-Y Avg Annual Return	5.22%	5-Y Avg Annual Rtn Rank	60
Volatility	13.84%	Volatility Rank(?)	93
Expected EPS Growth	1.47%	EPS Growth Rank(?)	24
Market Cap (billions)	179.16	Size Rank	100
Trailing P/E Ratio	13.82	Trailing P/E Rank(?)	81
Forward P/E Ratio	13.62	Forward P/E Ratio Rank	68
PEG Ratio	9.42	PEG Ratio Rank	3
Price/Sales	1.35	Price/Sales Rank(?)	59
Market/Book	2.06	Market/Book Rank(?)	52
Beta	0.37	Beta Rank	84
Alpha	-0.05	Alpha Rank	56

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Read our Complete Detailed Valuation Report on AT & T HERE.

Sector Talk--Autos/Tires/Trucks

  Below, we present the latest data on Autos/Tires/Trucks 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 Autos/Tires/Trucks Stocks--Short-Term Forecast Returns

Top-Five Autos/Tires/Trucks Stocks--Long-Term Forecast Returns

Top-Five Autos/Tires/Trucks Stocks--Composite Score

Top-Five Autos/Tires/Trucks Stocks--Most Overvalued

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The American Association of Individual Investors (AAII) was founded in 1978 by Dr. James Cloonan. Its purpose is to distill current financial theory and academic knowledge in a manner which allows its members to beat the market. In short, AAII's philosophy and membership base is a perfect match for ValuEngine's various newsletters, website services, and other products.

ValuEngine clients access proprietary stock valuation data on more than 4000 US equities in addition to forecast and ratings for more than 8000 stocks. They can also purchase ready-made portfolios based on all of our data which are designed to fit a variety of investment styles and risk/reward profiles.

ValuEngine is always searching for self-directed investors who recognize the value of our services--just like the members of AAII, and for that reason we are proud to announce that we were recently selected one of AAII's "Best of the Web" services.  AAII puts Valuengine.com within the "top 16 sites for consensus analyst estimates, ratings and recommendations, stock screening, and stock valuation.

It is important to note that in an era of free content, apps, and services, ValuEngine has almost always been the only fee-based service to win a stock valuation award from AAII. We have won this award numerous times and AAII notes that

ValuEngine provides a wide range of services for individual investors and is an excellent source for stock valuation. It was chosen as Editor’s Choice because of its in-depth analysis and innovative valuation techniques that are not available at other sites.

ValuEngine CEO Paul Henneman has always been a strong supporter of AAII's program and services for individual investors and noted that "ValuEngine's objective, cutting-edge research provides the tools for any investor looking to reduce management fees and handle their own portfolios. Savvy individuals, Wall St. professionals, and the leaders of AAII have known for years that ValuEngine.com offers an outstanding suite of products which an help improve returns and beat the market. So, we are of course pleased to be recognized by AAII for yet another year."

--Budweiser Fumbles SuperBowl Commercial

Anheuser-Busch (BUD) is the leading global brewer and one of the world's top five consumer products companies. Their portfolio of well over 200 beer brands continues to forge strong connections with consumers. They invest the majority of their brand-building resources on their Focus Brands - those with the greatest growth potential such as global brands Budweiser, Stella Artois and Becks, alongside Leffe, Hoegaarden, Bud Light, Skol, Brahma, Antarctica, Quilmes, Michelob Ultra, Harbin, Sedrin, Klinskoye, Sibirskaya Korona, Chernigivske, Hasserder and Jupiler. In addition, the company owns a 50 percent equity interest in the operating subsidiary of Grupo Modelo, Mexico's leading brewer and owner of the global Corona brand.

AB-InBev, like so many macro brewers, has been unable to address the problem of falling market share and popularity amongst young and old drinkers alike. Once a mainstay of the US market, AB-InBev's Budweiser is under assault from upstart craft brewers, whose segment keeps growing by leaps and bounds. In fact, in 2013 sales of craft beer exceeded those of Budweiser.

In the past, BUD has responded by acquiring craft brewers and adding them to their stable of brands. However, this past weekend the company embarked on another path with its highly controversial Super Bowl commercial, "Brewed the Hard Way." The ad, replete with images of bearded, plaid-clad "hipster" craft-beer drinkers, essentially mocked both craft beer and craft- beer consumers.

Reaction so far has been negative, with many analysts noting that AB's commercial even attacked a style of beer manufactured by its most recent craft acquisition, Elysian Brewing. This is doubly problematic given the fact that many craft drinkers refuse to indulge in a craft brewery's offerings--no matter how good in the past--once it is acquired by a large macro concern. Elysian Co-Founder Dick Cantwell noted that "it doesn't make our job any easier, and it certainly doesn't make me feel any better about a deal I didn't even want to happen. It's made a difficult situation even more painful."

Judging from the SuperBowl ad, AB-InBev remains clueless as to how it should address the changing tastes and demographics of the US beer consumer. Making of fun of potential customers--as well as lost ones--has fallen flat, just like the sales of AB-InBevs flagship product.

ValuEngine continues its HOLD recommendation on ANHEUSER-BU ADR for 2015-02-05. Based on the information we have gathered and our resulting research, we feel that ANHEUSER-BU ADR has the probability to ROUGHLY MATCH average market performance for the next year. The company exhibits ATTRACTIVE Company Size but UNATTRACTIVE Price Sales Ratio.

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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

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