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January 13, 2017

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VALUATION WATCH: Overvalued stocks now make up 64.86% of our


stocks assigned a valuation and 29.78% of those equities are calculated to
be overvalued by 20% or more. Fifteen sectors are calculated to be
overvalued.
MARKET OVERVIEW
Index

Started week

Friday AM

Change

Change %

ytd

DJIA

19848.82

19816.69

-32.13

-0.16%

0.27%

NASDAQ

5555.16

5568.88

13.72

0.25%

3.45%

RUSSELL 2000

1371.51

1345.74

-25.77

-1.88%

-0.84%

S&P 500

2269.14

2274.41

5.27

0.23%

1.59%

Summary of VE Stock Universe


Stocks Undervalued

35.14%

Stocks Overvalued

64.86%

Stocks Undervalued by 20%

14.72%

Stocks Overvalued by 20%

29.78%

SECTOR OVERVIEW
Sector

Change

MTD

YTD

Valuation

Last 12-M
Return

P/E
Ratio

Aerospace

0.50%

1.96%

1.96%

14.02% overvalued

22.06%

20.73

Auto-Tires-Trucks

0.05%

1.25%

1.25%

7.47% overvalued

41.71%

14.73

Basic Materials

-0.02%

4.96%

4.94%

13.36% overvalued

91.89%

28.66

Business Services

0.10%

0.37%

0.37%

11.70% overvalued

20.09%

24.41

Computer and Technology

0.27%

2.39%

2.97%

9.71% overvalued

26.81%

31.08

Construction

0.01%

0.58%

0.58%

10.57% overvalued

39.55%

20.4

Consumer Discretionary

-0.39%

0.59%

0.59%

4.60% overvalued

27.00%

24.35

Consumer Staples

-0.12%

1.25%

1.25%

5.93% overvalued

17.25%

23.88

Finance

0.31%

0.61%

0.61%

14.84% overvalued

25.75%

17.92

Industrial Products

0.33%

1.67%

1.67%

18.57% overvalued

38.55%

24.76

Medical

-0.30%

4.64%

4.64%

4.14% undervalued

7.73%

28.07

Multi-Sector Conglomerates

0.10%

1.77%

1.77%

19.26% overvalued

26.70%

20.16

Oils-Energy

-0.82%

2.35%

2.35%

17.69% overvalued

63.22%

27.37

Retail-Wholesale

0.01%

-0.16%

-0.16%

0.68% overvalued

13.48%

23.08

Transportation

0.36%

3.46%

3.46%

11.91% overvalued

32.94%

18.63

Utilities

-0.36%

1.32%

1.32%

10.99% overvalued

28.32%

22.04

Sector TalkBasic Materials


Below, we present the latest data on leading Basic Materials 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 Basic Materials Sector Stocks--Short-Term Forecast Returns


Ticker

Company Name

Market Price

Valuation

Last 12-M Retrn

TSE

TRINSEO SA

62.35

N/A

171.20%

TX

TERNIUM SA-ADR

23.78

35.30%

119.98%

RYI

RYERSON HOLDING

10.65

-13.12%

218.86%

SSRI

SILVER STD RES

9.89

N/A

157.22%

RYAM

RAYONIER ADV MT

15.51

N/A

120.31%

Top-Five Basic Materials Sector Stocks--Long-Term Forecast Returns


Ticker

Company Name

Market Price

Valuation

Last 12-M Retrn

FMSA

FAIRMOUNT SNTRL

12.55

N/A

888.19%

TECK

TECK RESOURCES

23.52

-6.99%

587.72%

CC

CHEMOURS COMPNY

24.26

N/A

575.77%

CLF

CLIFFS NATURAL

9.01

24.71%

552.90%

CDE

COEUR MINING

11.19

-11.49%

546.82%

Top-Five Basic Materials Sector Stocks--Composite Score


Ticker

Company Name

Market Price

Valuation

Last 12-M Retrn

MT

ARCELOR MITTAL

8.09

-23.07%

128.53%

TECK

TECK RESOURCES

23.52

-6.99%

587.72%

RYI

RYERSON HOLDING

10.65

-13.12%

218.86%

FOE

FERRO CORP

14.07

-7.82%

57.74%

VALE

VALE SA

9.8

20.22%

320.60%

Top-Five Basic Materials Sector Stocks--Most Overvalued


Ticker

Company Name

Market Price

Valuation

Last 12-M Retrn

UAN

CVR PARTNERS LP

6.15

270.96%

13.05%

SLCA

US SILICA HOLDI

57.49

85.31%

284.29%

ANDE

ANDERSONS INC

36.75

59.77%

44.34%

PVG

PRETIUM RES INC

10.14

57.04%

142.58%

ALB

ALBEMARLE CORP

93.05

51.26%

92.17%

Find out what Wall Street Investment and Media Professionals already know,
ValuEngine offers sophisticated stock valuation and forecast research as well as a
variety of portfolio screening and creation tools.

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
General Electric Company (GE) operates as a technology and financial services
company. Its segments include Energy Infrastructure, Aviation, Healthcare,
Transportation, Home & Business Solutions and GE Capital. The company's Energy
Infrastructure segment offers wind turbines; gas and steam turbines and generators.
Its Aviation segment offers jet engines, turboprop and turbo shaft engines, aerospace
systems and equipment. Its Healthcare segment provides medical imaging and
information technologies, medical diagnostics, patient monitoring systems. Its
Transportation segment provides drive technology solutions to various industries. Its
Home and Business Solutions segment provides home appliances; lighting products,
plant automation, hardware, software, and embedded computing systems. Its GE
Capital segment offers commercial loans and leases, fleet management, financial
programs, credit cards, personal loans and other financial services. General Electric
Company is headquartered in Fairfield, Connecticut.
VALUENGINE RECOMMENDATION: ValuEngine continues its HOLD recommendation
on General Electric for 2017-01-19. Based on the information we have gathered and
our resulting research, we feel that General Electric has the probability to ROUGHLY
MATCH average market performance for the next year. The company exhibits
ATTRACTIVE Company Size but UNATTRACTIVE Earnings Growth Rate.
You can download a free copy of detailed report on General Electric Company (GE)
from the link below.
Read our Complete Detailed Valuation Report on General Electric (GE) HERE.

ValuEngine Forecast
Target
Price*

Expected
Return

1-Month

31.19

-0.14%

3-Month

31.68

1.43%

6-Month

31.78

1.75%

1-Year

30.71

-1.66%

2-Year

38.13

22.10%

3-Year

40.15

28.58%

Valuation & Rankings


Valuation

24.25% overvalued

Valuation Rank(?)

1-M Forecast Return

-0.14%

1-M Forecast Return Rank

39

12-M Return

9.55%

Momentum Rank(?)

37

Sharpe Ratio

0.68

Sharpe Ratio Rank(?)

5-Y Avg Annual Return

11.36%

5-Y Avg Annual Rtn Rank

Volatility

16.68%

Volatility Rank(?)

Expected EPS Growth

6.00%

EPS Growth Rank(?)

Market Cap (billions)

313.89

Size Rank

Trailing P/E Ratio

20.81

Trailing P/E Rank(?)

Forward P/E Ratio

19.63

Forward P/E Ratio Rank

PEG Ratio

3.47

PEG Ratio Rank

Price/Sales

2.52

Price/Sales Rank(?)

Market/Book

3.76

Market/Book Rank(?)

24

84
75
78
31
100
61
35
12
41
33

Beta

1.18

Beta Rank

31

Alpha

-0.09

Alpha Rank

30

What's Hot
Market Overvaluation Remains Elevated
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 64.86% of the stocks to which we can assign a valuation
are overvalued and 29.78% of those stocks are overvalued by 20% or more. These
numbers are similar to what we saw when we published our last valuation study in
November.

However, they have increased--and have ran slightly above--the levels needed
to declare our first valuation warning since June, 2015. At that time, the SP500 was at
the 2100 level. Needless to say, from our model's perspective, equities are nowhere
near as "cheap" as they were back in late June of this year in the aftermath of "Brexit."

The so-called "Trump rally" or "post-election uncertainty rally" has been a boon
for the stock markets. Almost every major index has made new highs and flirts with
them almost every day. Things have cooled off a bit in the new year, but still, we got
a nice pop to close out 2016.

Even the Fed decision to raise rates slightly in December did little to cool off the
ardor for equities. Of course, we believe that the central blank should refrain from
additional rate hikes until workers can fully benefit from the recovery. For now, we
caution investors to remain vigilant for a move to the downside and to consider
booking some profits and perhaps ad some protection against a downside move.

The chart below tracks the valuation metrics so far this Summer/Fall. It encompasses
the lead up to the election and the post-election rally. It shows levels in excess of 40%.

The chart below tracks the valuation metrics from January 2016. 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&P
500 from March 2007*

*NOTE: Time Scale Compressed Prior to 2011.

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Or, sign up online with the easy-to-use portal HERE:

ValuEngine.com is an independent research provider, producing


buy/hold/sell recommendations, target price, and valuations on over 7,000
US and Canadian equities every trading day.
Visit www.ValuEngine.com for more information and a free trial.

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