8/20/2019 150828 ValuEngine Weekly: Materials Stocks,Apple,the Fed,and Market Neutral Strategy ResultsVe Weekly News
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August 28, 2015
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VALUATION WATCH: Overvalued stocks now make up 41!"# o$ ourstocks ass%&ned a valuat%on and 1'!(# o$ t)ose e*u%t%es are calculated to+e overvalued +, !-# or more .our sectors are calculated to +eovervalued//w%t) one at or near dou+le d%&%ts
MARKET OVERVIEW
Inde0 tarted week .r%da, A2 C)an&e C)an&e # ,td
3IA %&()"*( %&&%+"( 156(5 -7"# /"("#
NA3A8 ,(%"&% +%%"& 457"5 1-5"# 1(7#
9ULL !--- %%%)"*& %%("(( '4(7 '11# /41"#
;< 5-- %)&("%( %)+&") !1(7 111# /'5-#
ummar, o$ V tock Un%verse
tocks Undervalued 56(4#
tocks Overvalued 41!"#
tocks Undervalued +, !-# !'66#
tocks Overvalued +, !-# 1'4(#
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8/20/2019 150828 ValuEngine Weekly: Materials Stocks,Apple,the Fed,and Market Neutral Strategy ResultsVe Weekly News
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SECTOR OVERVIEW
ector C)an&e 2T3 =T3 Valuat%on Last 1!/2
9eturn
9at%oAerospace %"**. -&")+. -"/. )"+%. overvalued -*",. /"*
Auto/T%res/Trucks %"((. -&")&. -+",. )"(). undervalued -%"&&. %"*
?as%c 2ater%als ,". -"). -%(",. %+")&. undervalued -,*"//. /"/
?us%ness erv%ces %"((. -("&&. -/")). %"+(. overvalued -&"*,. ")&
Computer and Tec)nolo&, %")%. -"(*. -"&%. ",,. undervalued -+"%*. +"+
Construct%on "/+. -("&. -"+,. +",(. undervalued -("*/. "+
Consumer 3%scret%onar, %"+. -(". %". /"+. undervalued -*"%. &")+
Consumer taples %",. -("+,. -",(. ,"(*. overvalued -("),. %"*
.%nance %"%. -"(. -"/. "((. undervalued -("/. %*
Industr%al
8/20/2019 150828 ValuEngine Weekly: Materials Stocks,Apple,the Fed,and Market Neutral Strategy ResultsVe Weekly News
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Top/.%ve ?as%c 2ater%als ector tocks//Lon&/Term .orecast 9eturns
T%cker Compan, Name 2arket E0T@19 281: *"/* *"). %/".
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To %&n Up $or a
.9 T9IAL
8/20/2019 150828 ValuEngine Weekly: Materials Stocks,Apple,the Fed,and Market Neutral Strategy ResultsVe Weekly News
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"ree #o$%loa& 'or Rea&ers (s a 0onus to our Free Weekly #ewsletter su0scri0ers,
we are offering a F.EE $W#&$( of one of our Stock .eports
pple %nc# &'() is engaged in designing, manufacturing and marketing
mobile communication and media devices, personal computers, and portable digitalmusic players# The *ompany+s products and services include i'hone, i'ad, Mac, i'od,pple T, a portfolio of consumer and professional software applications, the iS and
Mac S . operating systems, i*loud, and a range of accessory, service and supportofferings# %t sells its products worldwide through its online stores, its retail stores, itsdirect sales force, third-party wholesalers, and resellers# pple %nc# is head/uartered in
*upertino, *alifornia#
alu0ngine continues its B12 recommendation on ''(0 %* for 4"!5-"6-47#
Based on the information we have gathered and our resulting research, we feel that''(0 %* has the probability to 1T'0898M average market performance for thene:t year# The company e:hibits TT8*T%0 *ompany Si;e and Sharpe 8atio#
.ead our 1omplete etailed Valuation .eport on (PP&E H9
http://www.valuengine.com/download/report/TMP_VE_AAPL_20150828037236.pdfhttp://www.valuengine.com/images/newsletter/weekly/150828AAPLchart.ashxhttp://www.valuengine.com/download/report/TMP_VE_AAPL_20150828037236.pdf
8/20/2019 150828 ValuEngine Weekly: Materials Stocks,Apple,the Fed,and Market Neutral Strategy ResultsVe Weekly News
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ValuEngine Forecast
Target
'rice<
0:pected
8eturn
1-onth !!=#"5 !#"">
!-onth !!=#?" !#75>
"-onth !!@#@! 3#4@>
1-#ear !4@#== !!#?6>
$-#ear !4"#75 @#?=>
!-#ear ?7#"? -!=#"4>
Valuation % Ran&ingsValuation 3#43> undervalued Valuation Ran& &A) =6
1- Forecast Return !#""> 1- Forecast Return Ran& ?7
1$- Return !"#5@> o'entu' Ran& &A) 6"
(har)e Ratio "#?? (har)e Ratio Ran& &A) ?3
*-# +vg +nnual Return 43#66> *-# +vg +nnual Rtn Ran& ?4
Volatility 4=#"?> Volatility Ran& &A) @7
E)ecte E.( /rowth 6#!7> E.( /rowth Ran& &A) =!
ar&et Ca) 0billions @57#73 (i2e Ran& !""
3railing .4E Ratio !4#6! 3railing .4E Ran& &A) 6!
Forwar .4E Ratio !!#6= Forwar .4E Ratio Ran& 74.E/ Ratio !#57 .E/ Ratio Ran& 4?
.rice4(ales 4#?3 .rice4(ales Ran& &A) 3!
ar&et45oo& 5#@3 ar&et45oo& Ran& &A) 4!
5eta "#6? 5eta Ran& 5"
+l)ha "#!@ +l)ha Ran& 6=
http://www.valuengine.com/ve/ValuationSummary#http://www.valuengine.com/ve/ValuationSummary#http://www.valuengine.com/ve/ValuationSummary#http://www.valuengine.com/ve/ValuationSummary#http://www.valuengine.com/ve/ValuationSummary#http://www.valuengine.com/ve/ValuationSummary#http://www.valuengine.com/ve/ValuationSummary#http://www.valuengine.com/ve/ValuationSummary#http://www.valuengine.com/ve/ValuationSummary#http://www.valuengine.com/ve/ValuationSummary#http://www.valuengine.com/ve/ValuationSummary#http://www.valuengine.com/ve/ValuationSummary#http://www.valuengine.com/ve/ValuationSummary#http://www.valuengine.com/charts/pricerating_jpg/AAPL.jpghttp://www.valuengine.com/ve/ValuationSummary#http://www.valuengine.com/ve/ValuationSummary#http://www.valuengine.com/ve/ValuationSummary#http://www.valuengine.com/ve/ValuationSummary#http://www.valuengine.com/ve/ValuationSummary#http://www.valuengine.com/ve/ValuationSummary#http://www.valuengine.com/ve/ValuationSummary#http://www.valuengine.com/ve/ValuationSummary#
8/20/2019 150828 ValuEngine Weekly: Materials Stocks,Apple,the Fed,and Market Neutral Strategy ResultsVe Weekly News
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W(at)s *ot
Market +rat!o%s I-.act /ote%t!al "E# Act!o%
This week+s trading action has unsettled markets and investors, but it may haveled to at least one positive outcome for stocks# t a briefing today for regional
economic conditions, ew 2ork 9ed Bank *hair--and 9M* member-- illiam Cudleytold reporters that Dat this moment, the decision to begin the normali;ation process atthe September E9M*F meeting seems less compelling to me than it did several
weeks ago# But normali;ation could become more compelling by the time of themeeting as we get additional information#G
That statement is definitely of the Dtea-leaves needing to be readD variety, but it
indicates that 1S markets should continue to trade under the benefit of the 9ed+s;ero-interest rate policy &H%8') for a while longer# 1S short-term rates have hoverednear "> for most of the past seven years now# This policy provided the only real boost
for the 1S economy as the fiscal options, controlled by politicians in ashington C*,were focused on austerity in lieu of a robust stimulus program#
%t would seem /uite premature to raise rates under the present circumstances,
and with the 9ed still responsible for a dual mandate--low inflation C fullemployment--it appears cooler heads will prevail thanks to the DrealityD provided by
*hina and the global market pull back# Cudley referenced this in his remarks bynoting that Iincoming data suggest the economy continues to grow at a moderatepace sufficient to cause a gradual tightening of the 1#S# labor marketG but
Iinternational developments have increased the downside risk to 1#S# economicgrowth#G
gain, as we have been noting for a while now, the 1S economy is recovering,
and we see some pressures within the labor market--as evidenced by changes inemployment practices on the part of al-Mart, McConald+s et al# e also see a low
level of inflation--bolstered by the cratering of oil and other commodities pricing#Stocks, despite their recent gyrations, remain the only game in town where
yields are concerned# e recommend investors with the means to weather this storm
stay the course# e do not foresee a long-term issue for the 1S economy here, andwe note that selling at the bottom of a down turn is often the worst move one canmake# n the other hand, this is a time to tighten up those stop-losses and to stay
8/20/2019 150828 ValuEngine Weekly: Materials Stocks,Apple,the Fed,and Market Neutral Strategy ResultsVe Weekly News
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attentive#
VE "orecast Market eutral /ort'ol!o S(rugs O''
C(!%a Tur-o!l, /osts !g +a!%
%t was another great result for the ValuEngine Forecast 1" ar&et 6eutral(trategy .ortfolio# Julyugust was a terrific month as volatility and *hina-driven
market sell off powered-up our short side# e posted a gain of 7#3!> and beat boththe S'5"" loss of @#"3> and the M(S. loss of !#!7># That+s a beat of 6=6 bps on the
M(S. and a whopping !3== bps to the SK' 5""L
The modified stop-lossed strategy with a suggested @"-=" allocation trailed thestandard market neutral allocation with a gain of =#@3># The trailing !4 monthpercentage return is =4#?@> for the newsletter and 5#==> for the M(S. (ong-Short
9undand -"#"5> for the S'5""# Since inception, our portfolio has returned !5?#@6> vsthe M(S. return of 3"#"5>#
This month demonstrated yet again the benefit of the market neutralapproach# ur shorts were ama;ing with massive pick ups for many selections# Ten ofsi:teen picks posted double-digit gains with several positions returning in e:cess of
="># (ongsas is to be e:pected given the market action this month-- were prettymuch a wash across the board with the e:ception of et !, 'NK0, and CouglasCynamic#
aluations have declined significantly and are looking oversold# 36#55> of thestocks we can assign a valuation are calculated to be overvalued-- with !!#?5> ofthem calculated to be overvalued by 4"> or more# s we have been saying for a
while now, we remain confident that the underlying 1S economy is strong-- andgetting stronger# Oowever, we live in an interconnected world and *hina has a cold#Time to tighten up those stop-losses#
Find $ut More (0out the VE Forecast *2 M#S Portfolio 3E.E
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8/20/2019 150828 ValuEngine Weekly: Materials Stocks,Apple,the Fed,and Market Neutral Strategy ResultsVe Weekly News
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Oere are the primary long and short-side selections and their performance for themonth#
L3I-FI6ELI6E !6#74 !7#6! -:9@1 -89?"*M'1T08S
T0*O(N2
Long 1 5AH 5E+AER H7E( !?#?4 !7#"= -$9?? -1898" *ST81*T%
Long 1 (3RA+ (3+RA-LI5 C+.-+ ==#6@ 3@#6@ -?9:: -1;9?!*S1M08
C%S*80T%82
Long 1 C+L C+L-+I6E F77=( 53#5? =?#@7 -!9@! -;9!! *S1M08 ST'(0S
Long 1 HR3/ HERI3+/E I6(>R 45#!? !6#3@ -"9?! -$;911 9%*0
Long 1 >E.( 6E3 1 >E.( 3ECH !6#=? !?#?6 198@ ?9:" %C1ST8%( '8C1*TLong 1 6L6K 6E 7#7! 7#=4 :9$@ !9;" M0C%*(
(hort 1 C7=I C7.+(( =IVER(F !@#=@3@ !@#3 :91" :9@@M1(T%-S0*T8
*N(M
(hort 1 53> .E+57=# E6ER/# !#@7 !#76 -:911 -"9*@ %(S 008N2
(hort 1 (HL= (E+R( HL=/ C. 43#@6 44#@= 19:8 89!@ 80T%( O(0S(0
(hort 1 =(B =I+6+ (HI..I6/ 7#@! 7#! :9*1 "9;: T8S'8TT%
(hort 1 CL6E CLE+6 E/# F>EL( @#!@ =#"4 $918 !89;8 1T%(%T%0S
.7R3F7LI7 373+L ;9!1
/(.C (%.*:: 4"??#@ !?7"#6? -!46#7! -"91!
L76/ .7R3F7LI7 -?9?*
(H7R3 .7R3F7LI7 1"91"
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every trading dayVisit our we0site for more information and a free trial
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