June 19, 2015

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VALUATION WARNING: Overvalued stocks now make up 66.43% of our

stocks assigned a valuation and 28.41% of those equities are calculated to
be overvalued by 20% or more. ALL sectors are calculated to be
overvalued--with eight at or near double digits.
MARKET OVERVIEW
Index

Started week

Friday AM

Change

Change %

ytd

DJIA

17890.76

18083.6

192.84

1.08%

1.46%

NASDAQ

5011.79

5128.96

117.17

2.34%

8.51%

RUSSELL 2000

1259.38

1285.98

26.6

2.11%

6.75%

S&P 500

2091.34

2118.36

27.02

1.29%

2.89%

Summary of VE Stock Universe

Stocks Undervalued

33.57%

Stocks Overvalued

66.43%

Stocks Undervalued by 20%

12.37%

Stocks Overvalued by 20%

28.41%

SECTOR OVERVIEW
Sector

Change

MTD

YTD

Valuation

Last 12-M
Return

P/E
Ratio

Aerospace

0.71%

0.86%

5.69%

20.56% overvalued

-4.29%

22.61

Auto-Tires-Trucks

0.75%

-1.17%

3.51%

5.70% overvalued

-5.43%

16.87

Basic Materials

0.22%

-0.92%

0.95%

3.03% overvalued

-14.40%

24.14

Business Services

0.78%

2.02%

5.98%

15.49% overvalued

3.32%

25.44

Computer and Technology

0.49%

1.13%

8.59%

17.03% overvalued

8.02%

30.83

Construction

0.62%

0.75%

2.98%

2.80% overvalued

0.70%

24.66

Consumer Discretionary

0.65%

1.33%

10.06%

14.59% overvalued

2.03%

28

Consumer Staples

0.61%

1.54%

4.48%

13.72% overvalued

2.84%

24.57

Finance

0.55%

1.52%

4.77%

8.89% overvalued

3.40%

17.84

Industrial Products

0.50%

0.39%

4.22%

5.41% overvalued

-4.23%

20.6

Medical

1.04%

2.77%

15.88%

25.03% overvalued

18.60%

30.67

Multi-Sector Conglomerates

0.76%

-0.51%

3.19%

13.83% overvalued

1.07%

23.01

Oils-Energy

-0.23%

-1.44%

-0.43%

8.04% overvalued

-34.72%

24.42

Retail-Wholesale

0.48%

0.70%

2.24%

14.20% overvalued

8.15%

26.2

Transportation

0.64%

-0.56%

0.65%

4.37% overvalued

0.72%

19.45

Utilities

1.08%

-1.10%

1.06%

4.00% overvalued

-5.05%

21.93

ValuEngine Newsletters Latest Results

VE Newsletter

Current
Benchmark *
Month Total

Last Month
Total

Benchmark *

Since
Inception

Benchmark *

Forecast MNS

2.53

-0.31

5.15

1.09

129.92

33.25

Dividend Stock

-2.10

-0.53

0.76

0.23

11.18

36.03

Small Cap Stock

4.79

1.22

2.43

-0.98

36.60

58.01

View

0.09

-1.20

-1.14

1.36

125.13

87.72

*NOTE: Benchmark for Forecast MNS for last month and inception is the MLSAX Long/Short Fund.
Benchmark for Small Cap is the Russell 2000 Small Cap Index (RUT). Benchmark for current month
Forecast MNS and all other portfolios for all time frames is the S&P500.

Sector TalkTransportation
Below, we present the latest data on leading Transportation Sector stocks from
our Institutional software package (VEI). These results were filtered by market price
and volume--no results below 3$/share or less than 100k shares/day volume.

Top-Five Transportation Sector Stocks--Short-Term Forecast Returns

Ticker

Company Name

Market Price

Valuation

Last 12-M Retrn

TNK

TEEKAY TANKERS

7.53

-35.43%

108.01%

UAL

UNITED CONT HLD

52.01

-15.67%

17.22%

AYR

AIRCASTLE LTD

23.13

1.02%

37.84%

TNP

TSAKOS EGY NAVG

9.9

-3.52%

37.88%

CVTI

COVENANT TRANS

26.87

-19.44%

152.54%

Top-Five Transportation Sector Stocks--Long-Term Forecast Returns

Ticker

Company Name

Market Price

Valuation

Last 12-M Retrn

TNK

TEEKAY TANKERS

7.53

-35.43%

108.01%

UAL

UNITED CONT HLD

52.01

-15.67%

17.22%

AYR

AIRCASTLE LTD

23.13

1.02%

37.84%

TNP

TSAKOS EGY NAVG

9.9

-3.52%

37.88%

CVTI

COVENANT TRANS

26.87

-19.44%

152.54%

Top-Five Transportation Sector Stocks--Composite Score

Ticker

Company Name

Market Price

Valuation

Last 12-M Retrn

LUV

SOUTHWEST AIR

33.86

-28.79%

28.02%

UAL

UNITED CONT HLD

52.01

-15.67%

17.22%

TNK

TEEKAY TANKERS

7.53

-35.43%

108.01%

ALK

ALASKA AIR GRP

63.99

-6.94%

29.98%

JBLU

JETBLUE AIRWAYS

19.96

-4.72%

106.63%

Top-Five Transportation Sector Stocks--Most Overvalued

Ticker

Company Name

Market Price

Valuation

Last 12-M Retrn

YRCW

YRC WORLDWD INC

13.8

300.00%

-38.37%

GOGL

GOLDEN OCEAN GP

3.73

149.19%

-71.83%

RLGT

RADIANT LOGIST

7.23

112.92%

133.98%

XPO

XPO LOGISTICS

47.47

79.93%

88.90%

ATSG

AIR TRANSPT SVC

10.5

57.69%

15.64%

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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 Beck's, 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.
VALUENGINE RECOMMENDATION: ValuEngine continues its HOLD
recommendation on ANHEUSER-BU ADR for 2015-06-18. 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.

ValuEngine Forecast
Target
Price*

Expected
Return

1-Month

129.69

0.86%

3-Month

130.63

1.58%

6-Month

134.12

4.30%

1-Year

141.78

10.26%

2-Year

147.83

14.97%

3-Year

94.82

-26.27%

Valuation & Rankings

Valuation

14.24% overvalued

Valuation Rank(?)

1-M Forecast Return

0.86%

1-M Forecast Return Rank

12-M Return

42.20%

Momentum Rank(?)

90

Sharpe Ratio

1.06

Sharpe Ratio Rank(?)

93

5-Y Avg Annual Return

25.34%

5-Y Avg Annual Rtn Rank

Volatility

23.90%

Volatility Rank(?)

Expected EPS Growth

9.35%

EPS Growth Rank(?)

Market Cap (billions)

749.01

Size Rank

Trailing P/E Ratio

15.29

Trailing P/E Rank(?)

Forward P/E Ratio

13.98

Forward P/E Ratio Rank

PEG Ratio

1.63

PEG Ratio Rank

Price/Sales

3.53

Price/Sales Rank(?)

Market/Book

6.23

Market/Book Rank(?)

Beta

0.83

Beta Rank

Alpha

0.29

Alpha Rank

36
95

92
71
43
100
77
68
31
28
22
58
90

What's Hot?
Good News From Fed Sparks Rally
Markets have jumped hard this week on a variety of good news for equities.
The NASDAQ has reached a level not seen since the dotcom boom of 2000 and both
the S&P 500 and the Dow have also jumped up once more. The latest leg up caused
yet another valuation warning because at these levels our models find that more
than 65% of the stocks we can assign a valaution are calculated to be overvaued.
Investors reacted positively to the latest news from the Fed that the economy is
firming up and while it is looking like rates are going up, the central bank is not quite
ready to boost them just yet and may let the economy run a bit more before easing
off the throttle.
Highlights from the Fed's latest FOMC meeting included the following:
Economic activity has been expanding moderately after having changed
little during the first quarter. The pace of job gains picked up while the
unemployment rate remained steady.
Market-based measures of inflation compensation remain low; surveybased measures of longer-term inflation expectations have remained
stable.

The Committee expects that, with appropriate policy accommodation,

economic activity will expand at a moderate pace, with labor market
indicators continuing to move toward levels the Committee judges
consistent with its dual mandate.
Inflation is anticipated to remain near its recent low level in the near term,
but the Committee expects inflation to rise gradually toward 2 percent over
the medium term as the labor market improves further and the transitory
effects of earlier declines in energy and import prices dissipate.
The Committee today reaffirmed its view that the current 0 to 1/4 percent
target range for the federal funds rate remains appropriate. In determining
how long to maintain this target range, the Committee will assess progress-both realized and expected--toward its objectives of maximum
employment and 2 percent inflation
The Committee anticipates that it will be appropriate to raise the target
range for the federal funds rate when it has seen further improvement in the
labor market and is reasonably confident that inflation will move back to its
2 percent objective over the medium term.
The Committee currently anticipates that, even after employment and
inflation are near mandate-consistent levels, economic conditions may, for
some time, warrant keeping the target federal funds rate below levels the
Committee views as normal in the longer run. (emphasis added)
We thus see a Fed that is properly balancing inflation concerns with efforts to
promote full employment. While it is often tough to read the tea leaves, here we have
a clear restatement of the Fed's dual mandate (manage inflation and promote
employment) and a clear indication that they are prepared to keep rates low until
they are sure the labor market has properly recovered. Thus it appears as though
equities will remain the only game in town for a while longer.

VE Forecast Market Neutral Newsletter Posts

Strong Pick Up Due to Short Positions
May/June was another good month for our portfolio as we posted a gain of
2.53% and beat both the SP500 loss of 0.31% and the MLSAX pick up of 0.97%. The
modified stop-lossed strategy with a suggested 60-40 allocation trailed the standard
market neutral allocation with a gain of 2.26%. The trailing 12 month percentage
return is 23.38% for the newsletter and 8.75% for the MLSAX Long-Short Fundand
9.46% for the SP500. Since inception, our portfolio has returned 129.92% vs the MLSAX
return of 33.25%.

It was another strange month as longs were lackluster despite the hard jump for
the markets in the past few days due to the recent FOMC announcements. We didn't
break 50% with our hit ratiolong or shortbut we managed a beat thanks to some
outstanding results from individual positions. Bright spots for longs were Net1, Gilead,
and the still strong TeeKay Tankers. Our shorts also featured major gains from Caesar's
again!--Peabody, and Navistar. Our three 30% gainers really helped to cover the
losses from the laggards in the portfolio.
Find Out More About the VE Forecast 16 MNS Newsletter HERE
Please click HERE to subscribe. You may download a sample copy HERE.
Here are the primary long and short-side selections and their performance for the
month:
Company Name

Entry Price
5/20/15

Exit Price

SPR

SPIRIT AEROSYSTEMS

53.96

56.02

2.06

3.82

AEROSPACE

AXL

AMERICAN AXLE & MFG

25.09

21.96

-3.13

-12.48

AUTO TIRES TRUCKS

Long 1

UNITED STATES STEEL

24.31

23.39

-0.92

-3.78

BASIC MATERIALS

Long 1

WU

WESTERN UNION

22.26

21.28

-0.98

-4.41

BUSINESS SERVICES

Long 1

AUO

AU OPTRONCS-ADR

5.24

4.69

-0.55

-10.50

COMPUTERS
TECHNOLOGY

Long 1

BZH

BEAZER HOMES

18.66

18.75

0.09

0.48

CONSTRUCTION

Long 1

STRZA

STARZ-LIBERTY CAPITAL-A

40.32

43.01

2.69

6.67

CONSUMER
DISCRETIONARY

Long 1

PPC

PILGRIMS PRIDE

25.53

24.33

-1.20

-4.70

CONSUMER STAPLES

Long 1

BFR

BANCO FRANC-ADR

18.43

15.39

-3.04

-16.49

FINANCE

Long 1

UEPS

NET 1 UEPS TECH

14.43

18.76

4.33

30.01

INDUSTRIAL PRODUCTS

Long 1

GILD

GILEAD SCIENCES

110.16

121.21

11.05

10.03

MEDICAL
MULTI-SECTOR
CONGLOM

Position

Ticker

Long 1
Long 1

Long 1

FSS

FED SIGNAL CP

15.42

Change %Change

15.27

-0.15

-0.97

Sector

Long 1

PZE

PETROBRAS EGY

7.27

6.68

-0.59

-8.12

OILS ENERGY

Long 1

FLWS

1800FLOWERS.COM

9.77

10.71

0.94

9.62

RETAIL WHOLESALE

Long 1

TNK

TEEKAY TANKERS

6.68

7.53

0.85

12.72

TRANSPORTATION

Long 1

TEO

TELECOM ARGENTINA

21.02

18.08

-2.94

-13.99

UTILITIES

Short 1

AVAV

AEROVIRONMENT

26.38

27.05

-0.67

-2.54

AEROSPACE

Short 1

NAV

NAVISTAR INTERNATIONAL

28.42

23.63

4.79

16.85

AUTO TIRES TRUCKS

Short 1

CDE

COEUR MINING

5.34

6.33

-0.99

-18.54

BASIC MATERIALS

Short 1

ENOC

ENERNOC INC

9.57

10.80

-1.23

-12.85

BUSINESS SERVICES

Short 1

FUEL

ROCKET FUEL INC

8.24

8.46

-0.22

-2.67

COMPUTERS
TECHNOLOGY

Short 1

KBR

KBR INC

18.10

19.77

-1.67

-9.24

CONSTRUCTION

Short 1

CZR

CAESARS ENTERTAINMENT

9.97

6.50

3.47

34.80

CONSUMER
DISCRETIONARY

Short 1

RDEN

ELIZABETH ARDEN

14.82

14.14

0.68

4.59

CONSUMER STAPLES

Short 1

GNW

GENWORTH FINANCIAL

7.90

7.93

-0.03

-0.38

FINANCE

Short 1

CAS

CASTLE (AM) &CO

6.69

6.28

0.41

6.13

INDUSTRIAL PRODUCTS

Short 1

AKBA

AKEBIA THERAPEUTICS

8.23

8.28

-0.05

-0.61

MEDICAL

Short 1

CODI

COMPASS DIVERSF

16.47

16.48

-0.01

-0.06

MULTI-SECTOR
CONGLOM

Position

Ticker

Company Name

Entry Price
5/20/15

Exit Price

Change %Change

Sector

Short 1

BTU

PEABODY ENERGY

3.76

2.46

1.30

34.57

OILS ENERGY

Short 1

ARCO

ARCOS DORADOS-A

5.28

5.82

-0.54

-10.23

RETAIL WHOLESALE

Short 1

YRCW

YRC WORLDWIDE INC

14.32

13.80

0.52

3.63

TRANSPORTATION

Short 1

CLNE

CLEAN EGY FUELS

7.59

7.66

-0.07

-0.92

UTILITIES

PORTFOLIO TOTAL
GSPC

S&P500

2.53
2097.45

2074.28

-23.17

-0.31

LONG PORTFOLIO

-0.13

SHORT PORTFOLIO

2.66

Find Out More About the VE Forecast 16 MNS HERE

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