February 27, 2015

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Valuation WATCH: Overvalued stocks now make up 59.57% of our stocks assigned a valuation and 20.55% of those equities are calculated to be overvalued by 20% or more. Twelve sectors are calculated to be overvalued--with six at or near double digits.

MARKET OVERVIEW

Index Started week Friday AM Change Change % ytd

DJIA 18140.76 18184.3 43.54 0.24% 2.03%

NASDAQ 4953.1 4980.42 27.32 0.55% 5.37%

RUSSELL 2000 1230.22 1238.61 8.39 0.68% 2.82%

S&P 500 2109.83 2110.29 0.46 0.02% 2.50%

Summary of VE Stock UniverseStocks Undervalued 40.43%

Stocks Overvalued 59.57%

Stocks Undervalued by 20% 15.31%

Stocks Overvalued by 20% 20.55%

SECTOR OVERVIEW

Sector Change MTD YTD Valuation Last 12-MReturn

P/ERatio

Aerospace -0.55% 7.79% 8.37% 19.32% overvalued 3.65% 20.99

Auto-Tires-Trucks -0.20% 9.17% 6.88% 3.20% overvalued -1.83% 16.41

Basic Materials -0.38% 3.55% 2.62% 2.39% undervalued -21.48% 26.47

Business Services 0.26% 8.35% 4.91% 6.71% overvalued 4.22% 25.61

Computer and Technology -0.03% 6.08% 4.73% 12.00% overvalued -0.98% 31.92

Construction -0.03% 5.28% 1.69% 4.11% undervalued -0.71% 24.7

Consumer Discretionary 0.09% 5.38% 2.33% 5.05% overvalued -4.10% 26.65

Consumer Staples 0.06% 3.68% 2.95% 9.88% overvalued 6.96% 24.64

Finance 0.00% 4.42% 0.94% 2.97% overvalued 3.54% 18.02

Industrial Products 0.18% 5.88% 1.44% 1.46% overvalued -7.08% 21.31

Medical 0.01% 7.31% 9.01% 14.72% overvalued 2.08% 32.92

Multi-Sector Conglomerates -0.09% 4.94% 4.99% 9.69% overvalued 11.96% 19.35

Oils-Energy -1.37% 7.18% 1.09% 2.84% undervalued -27.24% 20.02

Retail-Wholesale -0.11% 5.06% 0.97% 10.11% overvalued 8.29% 27.77

Transportation 0.16% 5.43% 1.57% 4.33% undervalued 5.80% 22.41

Utilities -0.56% 3.39% 0.95% 4.95% overvalued 7.01% 22.23

ValuEngine Newsletters Latest Results

VE Newsletter CurrentMonth Total

Benchmark * Last MonthTotal

Benchmark * SinceInception

Benchmark *

Forecast MNS 3.85 0.78 10.15 1.09 105.43 123.80

Dividend Stock -2.03 4.00 -4.40 -2.92 11.86 35.97

Small Cap Stock 5.60 2.86 -0.63 -0.09 30.67 55.74

View -1.05 -0.08 6.20 2.54 133.45 86.80

*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 Talk—Retail/WholesaleBelow, we present the latest data on leading Retail/Wholesale 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 Consumer Staples Sector Stocks--Short-Term Forecast Returns

Ticker Name Mkt Price Valuation(%) Last 12-MRetn(%)

SAFM SANDERSON FARMS 85.67 -12.77 10.9

BRFS BRF-BRASIL FOOD 23.1 -10.07 34.62

CAG CONAGRA FOODS 34.67 4.05 22.38

ADM ARCHER DANIELS 47.55 4.95 17.73

TSN TYSON FOODS A 40.87 -3.53 4.5

Top-Five Consumer Staples Sector Stocks--Long-Term Forecast Returns

Ticker Name Mkt Price Valuation(%) Last 12-MRetn(%)

SAFM SANDERSON FARMS 85.67 -12.77 10.9

BRFS BRF-BRASIL FOOD 23.1 -10.07 34.62

CAG CONAGRA FOODS 34.67 4.05 22.38

ADM ARCHER DANIELS 47.55 4.95 17.73

TSN TYSON FOODS A 40.87 -3.53 4.5

Top-Five Consumer Staples Sector Stocks--Composite Score

Ticker Name Mkt Price Valuation(%) Last 12-MRetn(%)

SAFM SANDERSON FARMS 85.67 -12.77 10.9

BRFS BRF-BRASIL FOOD 23.1 -10.07 34.62

TSN TYSON FOODS A 40.87 -3.53 4.5

ADM ARCHER DANIELS 47.55 4.95 17.73

CAG CONAGRA FOODS 34.67 4.05 22.38

Top-Five Consumer Staples Sector Stocks--Most Overvalued

Ticker Name Mkt Price Valuation(%) Last 12-MRetn(%)

SSP EW SCRIPPS CO 23.15 79.87 18.05

GCI GANNETT INC 35.68 55.46 21.11

SVU SUPERVALU INC 10 37.77 56.25

TAP MOLSON COORS-B 77.24 36.77 36.27

NYT NY TIMES A 14.18 30.14 -9.85

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What's Hot--

Valuations Adjust to Higher Market Levels 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 besure, 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 2900 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 58.76% of stocks are overvalued and 19.91% of those stocks are overvalued by 20% or more. Thus we have seen a relatively large shift in overvaluation over the past month. However, these figures are down significantly from where they were for much of 2014.

We are still within "normal" range for valuation, but a strong leg up could put us back into Valuation Warning range. What seems more significant is that the models have adjusted to the new higher levels for the SP500. For much of 2014 a market at 2100 would have pegged our overvaluation figures to a much higher range. In fact, one year ago, with the SP500 at 1875 or so, we had overvaluation numbers at @80%. Now, SP500 at 1900 seems like a buying opportunity.

And let's remember the fact that despite all the doom and gloom from certain quarters in Washington and New York over the past six years, this has been one of the most remarkable rallies in US history. Since the 666 inter day SP500 low of March 2009, that index is up more than 210%, the Dow is up more than 175%, and the NASDAQ hasjumped a massive 292%--meanwhile GLD (the SPDR Gold ETF) the scaremongers choice--is up a paltry 28%. Given a similar stock market rally under a Republican administration, you can be sure we would have heard talk about how the country was "saved" by the wise policies of that President for decades to come.

In addition to the valuation calculations, we find other reasons to remain optimistic about stocks. The latest news from Janet Yellen's Fed remains positive for US equities in the short term. Adjustments have been made to oil at @$50/barrel and the US is in an enviable position vis-a-vis energy right now. Employment is picking up steam—witness the latest announced wage increases from Wal-Mart, who is dealing with pressure from within and without when it comes to compensation. Let's just hope Congress doesn't screw up this momentum with any more ill-advised austerity moves or shut downs (partial or not.)

Subscribers Get FULL ACCESS to our Market and Sector Overviews

The chart below tracks the valuation metrics from January 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 January 2014

This chart shows overall universe under and over valuation in excess of 40% vs the S&P500 from March 2007*

*NOTE: Time Scale Compressed Prior to 2011.

--Top VE Newsletter Posts Another SP500 BeatFor January/February, the stock market continued its winning ways and laid in

some new highs. Our ValuEngine View Responded well to the market condtiions andwe returned to our winning ways with a significant gain of 6.2%. We beat the S&P 500index gain of 2.54% by 366 bps. The trailing 12 month gain of the VE View is 18.03%versus the S&P 500 return of 15.68%. The return since inception of the View is 133.45%versus the S&P's gain of 86.8.

For the second month in-a-row we had a 66% hit-ratio with declines beingmodest. Our biggest decline was just 7.22%. Gains were better this month, with fivepositions near, or well into double-digits. Lannett led the way with a huge 42% gainwhile Lennar, Greenbrier, Lear, and United Rentals powered up our results. Onceagain our suggested stop-loss levels of 15% had no effect given the few losers and thelimited nature of their declines.

Return Comparison vs. S&P 500

Last 12 Months

VE View 18.03%

S&P 500 15.68%

The View features the absolute top quality picks from our extensively tracked and tested quant models. It is the only newsletter which features picks from both the ValuEngine Stock Valuation and Forecast Model. With the View, investors can utilize the power of ValuEngine to achieve their goals in a steady and consistent manner.

Average Monthly Return Statistics

Outperforming S&P 500 28.45%

Average Return 1.65%

With the ValuEngine View Newsletter you Receive 20 Carefully Selected Stock Picks Representing the Most Up-to-Date Calculations of our Award-Winning Stock Valuation

and Forecast Models

CLICK HERE TO SUBSCRIBE NOW

Here are the latest results from January/February 2015:

Ticker Company Name EntryPrice

1/23/15

ExitPrice

Change %Change

ARRS ARRIS GROUP INC 28.14 29.01 0.87 3.09

AUO AU OPTRONCS-ADR 5.68 5.27 -0.41 -7.22

BBD BANCO BRADESCO 13.9 13.36 -0.54 -3.88

BT BT GROUP PLC-ADR 63.64 68.79 5.15 8.09

CYS CYS INVESTMENTS 9.01 9 -0.01 -0.11

GBX GREENBRIER COMPANIES 53.67 59.9 6.23 11.61

GILD GILEAD SCIENCES 105.14 104.7 -0.44 -0.42

HCA HCA HOLDINGS 70.4 70.41 0.01 0.01

HELE HELEN OF TROY 77.53 78.28 0.75 0.97

LCI LANNETT INC 45.26 64.27 19.01 42.00

LEA LEAR CORPORATION 99.7 110.12 10.42 10.45

LEN LENNAR CORP -A 43.79 51.21 7.42 16.94

MU MICRON TECH 30.89 30.77 -0.12 -0.39

MUSA MURPHY USA INC 69.51 71.42 1.91 2.75

URI UNITED RENTALS INC 86.03 93.86 7.83 9.10

LONG PORTFOLIO 6.20

GSPC S&P500 2063.15 2115.48 52.33 2.54

Our Investment Strategies Focus on Dozens of Fundamental and Technical Factors forover 7,000 Individual Stocks, Synthesize the Data, and then Come Up with a Portfolio

AAII Selects ValuEngine.com "Best of the Web"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."