March 11, 2016

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VALUATION WATCH: Overvalued stocks now make up 37.27% of our

stocks assigned a valuation and 10.93% of those equities are calculated to
be overvalued by 20% or more. Three sectors are calculated to be
overvalued.
MARKET OVERVIEW
Index

Started week

Friday AM

Change

Change %

ytd

DJIA

16991.29

17197.3

206.01

1.21%

-1.31%

NASDAQ

4690.88

4723.32

32.44

0.69%

-5.67%

RUSSELL 2000

1081.28

1077.52

-3.76

-0.35%

-5.14%

S&P 500

1996.11

2014.78

18.67

0.94%

-1.43%

Summary of VE Stock Universe

Stocks Undervalued

62.73%

Stocks Overvalued

37.27%

Stocks Undervalued by 20%

28.67%

Stocks Overvalued by 20%

10.93%

SECTOR OVERVIEW
Sector

Change

MTD

YTD

Valuation

Last 12-M
Return

P/E
Ratio

Aerospace

-0.64%

2.53%

-5.03%

5.75% undervalued

-10.37%

17.74

Auto-Tires-Trucks

-1.08%

7.82%

-3.35%

11.97% undervalued

-20.59%

12.04

Basic Materials

0.54%

9.34%

12.60%

3.97% overvalued

-4.20%

26.4

Business Services

-1.39%

2.21%

-3.34%

5.95% undervalued

-12.23%

21.17

Computer and Technology

-0.53%

2.48%

0.64%

4.77% undervalued

-9.78%

25.95

Construction

-1.58%

3.60%

-1.70%

11.68% undervalued

-6.92%

18.57

Consumer Discretionary

0.02%

3.54%

-0.67%

6.65% undervalued

-8.04%

24

Consumer Staples

-0.39%

2.95%

1.43%

6.27% overvalued

1.33%

23.81

Finance

-0.20%

3.34%

-4.20%

6.84% undervalued

-7.33%

15.17

Industrial Products

-0.66%

5.03%

0.18%

2.38% undervalued

-13.21%

17.58

Medical

-0.93%

2.58%

-11.69%

15.33% undervalued

-24.88%

25.86

Multi-Sector Conglomerates

-1.06%

5.62%

-0.39%

0.40% undervalued

-15.34%

18.95

Oils-Energy

-1.05%

12.23%

1.96%

10.32% undervalued

-35.74%

21.69

Retail-Wholesale

-0.45%

3.07%

-0.73%

7.59% undervalued

-11.67%

22.28

Transportation

-0.62%

4.28%

-1.76%

13.85% undervalued

-23.89%

12.56

Utilities

0.21%

2.97%

3.66%

7.97% overvalued

-0.95%

23.3

Sector TalkIndustrial Products

Below, we present the latest data on leading Industrial Products Sector stocks
from our Professional Stock Analysis Service. We applied some basic liquidity
criteria--share price greater than $3 and average daily volume in excess of 100k
shares. We have been following the sector closely of late because it has been
correlated so tightly to overall equity price moves.

Top-Five Industrial Products Sector Stocks--Short-Term Forecast Returns

Ticker

Company Name

Market Price

Valuation(%)

Last 12-Mon
Retn(%)

BRSS

GLOBAL B&C HLD

24.74

N/A

64.17%

ACCO

ACCO BRANDS CP

7.8

1.51%

7.88%

HOLI

HOLLYSYS AUTOMT

19.88

-17.78%

9.96%

WOR

WORTHINGTON IND

33.26

6.93%

31.93%

RS

RELIANCE STEEL

66.58

25.34%

19.83%

Top-Five Industrial Products Sector Stocks--Long-Term Forecast Returns

Ticker

Company Name

Market Price

Valuation

Last 12-M Retrn

BRSS

GLOBAL B&C HLD

24.74

N/A

64.17%

ACCO

ACCO BRANDS CP

7.8

1.51%

7.88%

HOLI

HOLLYSYS AUTOMT

19.88

-17.78%

9.96%

WOR

WORTHINGTON IND

33.26

6.93%

31.93%

RS

RELIANCE STEEL

66.58

25.34%

19.83%

Top-Five Industrial Products Sector Stocks--Composite Score

Ticker

Company Name

Market Price

Valuation

Last 12-M Retrn

HOLI

HOLLYSYS AUTOMT

19.88

-17.78%

9.96%

CCK

CROWN HLDGS INC

47.59

-12.45%

-5.80%

ACCO

ACCO BRANDS CP

7.8

1.51%

7.88%

WIRE

ENCORE WIRE CP

36.84

-12.39%

8.99%

SWK

STANLEY B&D INC

98.35

-2.07%

2.43%

Top-Five Industrial Products Sector Stocks--Most Overvalued

Ticker

Company Name

Market Price

Valuation

Last 12-M Retrn

MRC

MRC GLOBAL INC

14.62

210.47%

22.75%

DXPE

DXP ENTERPRISES

16.53

208.93%

-63.11%

ERII

ENERGY RECOVERY

9.58

92.00%

248.36%

TS

TENARIS SA-ADR

23.59

69.55%

-14.03%

CENX

CENTURY ALUM CO

7.82

48.63%

-47.32%

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Free Download for Readers

As a bonus to our Free Weekly Newsletter subscribers,
we are offering a FREE DOWNLOAD of one of our Stock Reports
Yahoo! Inc.(YHOO) is a global Internet communications, commerce and media
company that offers a comprehensive branded network of services. As one of the first
online navigational guides to the World Wide Web, Yahoo! is one of the leading
guides in terms of traffic, advertising, and household and business user reach. The
company also provides online business and enterprise services designed to enhance
the productivity and Web presence of Yahoo!'s clients.
ValuEngine continues its SELL recommendation on YAHOO! INC for 2016-03-10.
Based on the information we have gathered and our resulting research, we feel that
YAHOO! INC has the probability to UNDERPERFORM average market performance for
the next year. The company exhibits UNATTRACTIVE Price Sales Ratio and P/E Ratio.
Read our Complete Detailed Valuation Report on YHOO HERE.

ValuEngine Forecast
Target
Price*

Expected
Return

1-Month

32.69

-0.41%

3-Month

33.01

0.59%

6-Month

33.50

2.07%

1-Year

31.21

-4.90%

2-Year

40.73

24.11%

3-Year

47.84

45.76%

Valuation & Rankings

Valuation

45.24% overvalued

Valuation Rank(?)

1-M Forecast Return

-0.41%

1-M Forecast Return Rank

12-M Return

-23.09%

Momentum Rank(?)

Sharpe Ratio

0.47

Sharpe Ratio Rank(?)

5-Y Avg Annual Return

13.24%

5-Y Avg Annual Rtn Rank

Volatility

28.27%

Volatility Rank(?)

Expected EPS Growth

47.06%

EPS Growth Rank(?)

Market Cap (billions)

31.09

Size Rank

Trailing P/E Ratio

193.06

Trailing P/E Rank(?)

Forward P/E Ratio

131.28

Forward P/E Ratio Rank

PEG Ratio

4.10

PEG Ratio Rank

Price/Sales

6.26

Price/Sales Rank(?)

Market/Book

1.11

Market/Book Rank(?)

Beta

1.41

Beta Rank

Alpha

-0.21

Alpha Rank

5
21
35
87
89
60
76
97
32
2
9
13
69
25
30

What's Hot
Valuations Hover Just Below Normal Range
ValuEngine tracks more than 7000 US equities, ADRs, and foreign stock which
trade on US exchanges as well as @1000 Canadian equities. When EPS estimates are
available for a given equity, our model calculates a level of mispricing or valuation
percentage for that equity based on earnings estimates and what the stock should
be worth if the market were totally rational and efficient--an academic exercise to be
sure, but one which allows for useful comparisons between equities, sectors, and
industries. Using our Valuation Model, we can currently assign a VE valuation
calculation to more than 2800 stocks in our US Universe.
We combine all of the equities with a valuation calculation to track market
valuation figures and use them as a metric for making calls about the overall state of
the market. Two factors can lower these figures-- a market pullback, or a significant
rise in EPS estimates. Vice-versa, a significant rally or reduction in EPS can raise the
figure. Whenever we see overvaluation levels in excess of @ 65% for the overall
universe and/or 27% for the overvalued by 20% or more categories, we issue a
valuation warning.

We now calculate that 37.27% of the stocks we can assign a valuation are
overvalued and 10.93% of those stocks are overvalued by 20% or more. These
numbers have recovered a bit along with the market rally since the earlier
"unpleasantness" of 2016. We are now showing stocks that have recovered in value,
are less cheap than last month, and also hovering very close to "normal" range-between 40-60%.
2016 has been a challenge for investors. markets have recovered somewhat
over the past month, but are still down between 1-6% (SP500, DOW, and NASDAQ).
We have been in a seven-year up market--almost the entirety of the Obama
administration--and thus we have a rally that is long-in-the-tooth despite a continuing
drumbeat of decent news from the US economy--labor market, housing, autos, etc.
The challenge has come from elsewhere as the Chinese stock carnage and
devaluation, along with ongoing problems in Europe, chaos for commodities-especially oil--etc. have battered markets recently. Because of these external factors,
we still believe that the Fed move to raise interest rates was premature at best. US
growth rates are anemic and the labor market still hasn't provided the sort of wage
gains that are to be expected with a full--and fair--recovery. We hope that the Fed
might pay attention to more of its two-part mandate by letting unemployment slip
enough to boost wages for US workers. We think this would help to further bolster the
economy despite the global uncertainties.
In case you hadn't noticed, the US is in a presidential election cycle, which is in
the past has correlated to a decent year for stocks. We find that any demands for
additional austerity on the part of some right-wing candidates would only damage
the US recovery. From the left, we note that one candidate is widely supported by
Wall St.-- which is hardly a harbinger of damaging policies for investors. On the other
hand, the long-shot Democrat promises a radically different approach, which will
certainly take a bite out of the financial sector--if implemented.
In any case, we remain stunned at just how wrong the pundits had it during the
last administrative change, when screams of "socialism" and warnings of total
economic collapse were the norm. As the long-term valuation chart below illustrates,
we have witnessed a remarkable market since the devilish SP500 intra day low of 666
on March 9, 2009.

The chart below tracks the valuation metrics from March 2015. It shows levels in
excess of 40%.

This chart shows overall universe over valuation in excess of 40% vs the S&P 500 from
March 2013

This chart shows overall universe under and over valuation in excess of 40% vs the S&P
500 from March 2007*

*NOTE: Time Scale Compressed Prior to 2011.

ValuEngine Capital Is Now Autotrading Our

Strategies
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fundamental variables such as a company's trailing 12-month Earnings-PerShare (EPS), the analyst consensus estimate of the company's future 12month EPS, and the 30-year Treasury yield are all used to create a more

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Strategy: The ValuEngine Market Neutral Strategy is the product of
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