January 8, 2016

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VALUATION WATCH: Overvalued stocks now make up 31.36% of our stocks assigned a valuation and 9.85% of those equities are calculated to be overvalued by 20% or more. One sector is calculated to be overvalued.

MARKET OVERVIEW

Index Started week Friday PM Change Change % ytd

DJIA 17405.48 16460.1 -945.38 -5.43% -7.65%

NASDAQ 4897.65 4677.74 -219.91 -4.49% -1.04%

RUSSELL 2000 1134.08 1057.68 -76.4 -6.74% -12.20%

S&P 500 2038.2 1935.92 -102.28 -5.02% -5.97%

Summary of VE Stock UniverseStocks Undervalued 68.64%

Stocks Overvalued 31.36%

Stocks Undervalued by 20% 34.16%

Stocks Overvalued by 20% 9.85%

SECTOR OVERVIEW

Sector Change MTD YTD Valuation Last 12-MReturn

P/ERatio

Aerospace -1.71% -3.04% -3.04% 3.56% undervalued -4.66% 19.71

Auto-Tires-Trucks -4.14% -8.73% -8.73% 20.02% undervalued -14.93% 11.71

Basic Materials -2.71% -4.42% -4.44% 16.71% undervalued -24.66% 23.16

Business Services -2.71% -5.41% -5.41% 5.25% undervalued -11.93% 22.48

Computer and Technology -2.42% -4.84% -3.54% 5.03% undervalued -6.08% 27.72

Construction -2.92% -5.43% -5.43% 13.91% undervalued -7.57% 18.38

Consumer Discretionary -2.24% -4.30% -4.30% 10.73% undervalued -7.84% 23

Consumer Staples -1.93% -3.87% -3.87% 1.16% overvalued -4.30% 22.72

Finance -2.05% -3.67% -3.67% 5.83% undervalued -6.63% 15.6

Industrial Products -2.45% -4.46% -4.46% 10.67% undervalued -14.39% 17.06

Medical -3.55% -5.58% -5.58% 7.62% undervalued -10.25% 27.04

Multi-Sector Conglomerates -2.07% -4.92% -4.92% 8.30% undervalued -15.68% 16.03

Oils-Energy -4.07% -7.97% -7.97% 23.50% undervalued -38.20% 21.9

Retail-Wholesale -1.57% -3.81% -3.81% 11.59% undervalued -12.71% 22.42

Transportation -3.48% -6.84% -6.84% 25.10% undervalued -28.74% 12.6

Utilities -2.42% -3.51% -3.51% 4.25% undervalued -9.92% 22.02

Sector Talk—Oils and EnergyBelow, we present the latest data on leading Oils and Energy Sector stocks

from our Professional Stock Analysis Service. These results were filtered by market price and volume--no results below 3$/share or less than 100k shares/day volume.

Top-Five Oils and Energy Sector Stocks--Short-Term Forecast Returns

Ticker Company Name Market Price Valuation(%) Last 12-MonRetn(%)

PZE PETROBRAS EGY 5.69 n/a 26.44

JASO JA SOLAR HOLDGS 8.5 -42.28 10.61

JKS JINKOSOLAR HLDG 20.85 -19.15 19.69

TSO TESORO CORP 107.03 -4.26 51.58

BAK BRASKEM SA 13.48 n/a 14.63

Top-Five Oils and Energy Sector Stocks--Long-Term Forecast Returns

Ticker Company Name Market Price Valuation(%) Last 12-MonRetn(%)

PZE PETROBRAS EGY 5.69 n/a 26.44

JASO JA SOLAR HOLDGS 8.5 -42.28 10.61

JKS JINKOSOLAR HLDG 20.85 -19.15 19.69

TSO TESORO CORP 107.03 -4.26 51.58

BAK BRASKEM SA 13.48 n/a 14.63

Top-Five Oils and Energy Sector Stocks--Composite Score

Ticker Company Name Market Price Valuation(%) Last 12-MonRetn(%)

N/A N/A N/A N/A N/A

N/A N/A N/A N/A N/A

N/A N/A N/A N/A N/A

N/A N/A N/A N/A N/A

N/A N/A N/A N/A N/A

Top-Five Oils and Energy Sector Stocks--Most Overvalued

Ticker Company Name Market Price Valuation(%) Last 12-MonRetn(%)

NOG NORTHRN OIL&GAS 3.37 300.00 -37.36

YGE YINGLI GREEN EN 3.43 300.00 63.33

BCEI BONANZA CREEK 4.43 174.27 -79.69

GLF GULFMARK OFFSHR 3.23 145.26 -84.91

SN SANCHEZ ENERGY 3.79 115.76 -52.45

Find out what Wall Street Investment and Media Professionals already know,ValuEngine offers sophisticated stock valuation and forecast research as well as a

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Ford Motor Company (F) produces cars and trucks. The company and its subsidiaries also engage in other businesses, including manufacturing automotive components and systems and financing and renting vehicles and equipment. The company is divided up into the following four operating segments: Automotive, Visteon Automotive Systems, Ford Motor Credit Company, and The Hertz Corporation.

ValuEngine continues its BUY recommendation on FORD MOTOR CO for 2016-01-07. Based on the information we have gathered and our resulting research, we feel that FORD MOTOR CO has the probability to OUTPERFORM average market performance for the next year. The company exhibits ATTRACTIVE Company Size and P/E Ratio.

Read our Complete Detailed Valuation Report on Ford Motor Company HERE.

ValuEngine Forecast

TargetPrice*

ExpectedReturn

1-Month 12.78 0.64%

3-Month 12.99 2.25%

6-Month 12.96 2.08%

1-Year 13.67 7.63%

2-Year 12.84 1.09%

3-Year 13.06 2.86%

Valuation & RankingsValuation 18.74% undervalued Valuation Rank(?) 65

1-M Forecast Return 0.64% 1-M Forecast Return Rank 91

12-M Return -15.56% Momentum Rank(?) 46

Sharpe Ratio -0.14 Sharpe Ratio Rank(?) 46

5-Y Avg Annual Return -3.51% 5-Y Avg Annual Rtn Rank 48

Volatility 24.90% Volatility Rank(?) 64

Expected EPS Growth 19.88% EPS Growth Rank(?) 57

Market Cap (billions) 48.88 Size Rank 99

Trailing P/E Ratio 7.89 Trailing P/E Rank(?) 93

Forward P/E Ratio 6.58 Forward P/E Ratio Rank 91

PEG Ratio 0.40 PEG Ratio Rank 64

Price/Sales 0.34 Price/Sales Rank(?) 85

Market/Book 1.78 Market/Book Rank(?) 50

Beta 1.28 Beta Rank 29

Alpha -0.09 Alpha Rank 43

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Valuations On The Cheap Side As 2016 BeginsValuEngine 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 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 31.36% of the stocks we can assign a valuation are overvalued and 9.85% of those stocks are overvalued by 20% or more. These numbershave decreased significantly since the last time we published our monthly valuation study. We are now showing stocks that are cheaper from our Valuation Model's perspective. Certainly not as cheap as we have seen, but more of a bargain than wesaw back in November.

Investors remained concerned by the world-wide growth picture even as the US continues to post decent economic data. As we noted when the Fed announced their rate hike, we feel this move was a bit premature and should have been postponed in the midst of falling and/or volatile oil prices, Middle East unrest, the Chinese stock slide and economic downturn, wage stagnations for US workers, etc.

Those factors may have a contagion effect for the US markets, even as the US remains the economy of last resort and the US dollar remains a safe haven. You can see their effects on the market so far this year, as 2016 is proving to be a bit of a downer so far with investors selling off positions due to short-term fears over China andshare-price declines in their markets.

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 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.

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