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March 12, 2013

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VALUATION WARNING: Our models find that overvaluation is at levels typically seen when a market pullback may occur. Overvalued stocks now make up almost 67% of our universe and 28% of the universe is calculated to be overvalued by 20% or more. Fifteen of Sixteen sectors are calculated to be overvalued.

Merged and Flying


--AMR Corp Takes off for ValuEngine View Newsletter AMR Corporation operations fall almost entirely in the airline industry. AMR's principal subsidiary is American Airlines, Inc. American is one of the largest scheduled passenger airlines in the world and provides scheduled jet service to more than 169 destinations throughout North America, the Caribbean, Latin America, Europe and the Pacific. American is also one of the largest scheduled air freight carriers in the world, providing a full range of freight and mail services to shippers throughout its system.

AMR announced a merger with US Airways last month and since then the stock has been on a nice run. We selected it for our VE View Newsletter this month and in just three weeks the stock is up more than 15%. The stock has impressive valuation, forecast, P/E, and momentum.

ValuEngine Forecast
Target Price* Expected Return 3.44% 12.32% 15.60% 37.06% -25.78% -45.47%

1-Month 3-Month 6-Month 1-Year 2-Year 3-Year

3.36 3.65 3.76 4.45 2.41 1.77

Valuation & Rankings


Valuation 1-M Forecast Return 12-M Return Sharpe Ratio 5-Y Avg Annual Return Volatility Expected EPS Growth Market Cap (billions) Trailing P/E Ratio Forward P/E Ratio 50.31% undervalued 3.44% 587.83% -0.2 -25.50% 129.62% 347.62% 1.09 6.19 1.38 Valuation Rank 1-M Forecast Return Rank Momentum Rank Sharpe Ratio Rank 5-Y Avg Annual Rtn Rank Volatility Rank EPS Growth Rank Size Rank Trailing P/E Rank Forward P/E Ratio Rank 94 100 100 38 22 6 96 72 98 100

Valuation & Rankings


PEG Ratio Price/Sales Market/Book Beta Alpha 0.02 0.06 n/a 1.72 n/a PEG Ratio Rank Price/Sales Rank Market/Book Rank Beta Rank Alpha Rank 95 96 n/a 22 n/a

Market Overview
Summary of VE Stock Universe
Stocks Undervalued Stocks Overvalued Stocks Undervalued by 20% Stocks Overvalued by 20% 34.36% 65.64% 14.17% 28.23%

Sector Overview
Sector
Aerospace Auto-Tires-Trucks Basic Materials Business Services Computer and Technology Construction Consumer Discretionary Consumer Staples Finance Industrial Products Medical Multi-Sector Conglomerates Oils-Energy Retail-Wholesale Transportation Utilities

Change
-0.25% 0.87% 0.29% 0.26% 0.15% 0.16% 0.44% 0.09% 0.18% 0.34% 0.35% 0.67% -0.20% 0.35% 0.62% 0.05%

MTD
2.75% 3.28% 3.77% 3.61% 2.31% 2.94% 3.74% 3.69% 2.57% 3.81% 3.22% 1.59% 1.65% 3.30% 3.58% 2.16%

YTD
9.08% 9.16% 5.72% 11.34% 10.76% 11.75% 12.51% 8.96% 11.55% 12.74% 11.58% 5.59% 8.44% 13.83% 17.97% 6.36%

Valuation
9.93% overvalued 17.43% overvalued 3.73% undervalued 16.28% overvalued 16.99% overvalued 23.43% overvalued 13.82% overvalued 23.44% overvalued 18.65% overvalued 17.15% overvalued 10.80% overvalued 10.70% overvalued 5.62% overvalued 16.75% overvalued 21.46% overvalued 11.79% overvalued

Last 12MReturn
4.89% 4.84% -28.41% 14.27% 1.76% 23.39% 7.10% 9.07% 13.44% 5.45% 9.63% 13.84% -13.41% 13.36% 6.12% 2.21%

P/E Ratio
14.19 15.92 19.08 21.58 26.17 25.97 22.52 19.2 17.74 18.82 23.57 15.65 24.33 19.99 20.38 17.81

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