August 17, 2012

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MARKET OVERVIEW

Index
DJIA NASDAQ RUSSELL 2000 S&P 500

Week Open
13204.93 3018.27 801.48 1405.87

Thurs. Close
13250.1 3062.39 813.08 1415.51

Change
45.17 44.12 11.6 9.64

% Change
0.34% 1.46% 1.45% 0.69%

YTD
8.45% 17.55% 9.74% 12.56%

Summary of VE Stock Universe

Stocks Undervalued Stocks Overvalued Stocks Undervalued by 20% Stocks Overvalued by 20% 57.97% 42.03% 25.44% 13.97%

SECTOR OVERVIEW
Sector
Aerospace Auto-Tires-Trucks Basic Materials Business Services Computer and Technology Construction Consumer Discretionary Consumer Staples Finance Industrial Products Medical Multi-Sector Conglomerates Oils-Energy Retail-Wholesale Transportation Utilities

Change
0.57% 1.52% 1.57% 1.00% 1.02% 2.22% 0.85% 0.64% 0.54% 1.20% 0.51% 0.64% 0.79% 0.90% 0.49% 0.95%

MTD
2.70% 5.23% 4.84% 2.11% 4.16% 5.08% 2.22% 3.14% 6.04% 2.37% 2.28% 3.58% 2.83% 2.29% 1.04% 1.83%

YTD
2.94% 4.74% -0.02% 6.55% 7.13% 87.05% 14.13% 13.18% 21.15% 2.56% 15.43% 11.59% -6.93% 13.26% 8.78% 2.91%

Valuation
3.02% undervalued 8.21% undervalued 9.31% undervalued 0.06% overvalued 12.65% overvalued 6.35% overvalued 1.59% overvalued 10.43% overvalued 9.11% overvalued 1.34% undervalued 18.69% overvalued 3.91% undervalued 1.33% undervalued 6.43% overvalued 0.17% overvalued 15.34% overvalued

Last 12MReturn
1.33% -4.16% -29.94% 5.70% -2.10% 16.66% 2.67% 2.74% 9.15% -3.75% 0.02% 7.97% -15.50% 14.01% -3.70% 3.91%

P/E Ratio
22.45 18.4 25.84 23.83 42.56 29.82 28.21 19.54 19.14 22.48 40.75 15.11 36.36 24.96 18.01 18.37

Sector TalkTechnology
Below, we present the latest data on leading Tech 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 Technology Sector Stocks--Short-Term Forecast Returns

Ticker
SYNC SREV VHC INOD AXTI

Name
SYNACOR INC SERVICESOURCE VIRNETX HOLDING INNODATA ISOGEN AXT INC

Mkt Price
8.07 8.15 26.17 3.58 3.09

Valuation(%)
-27.09 -41.63 -9.33 -29.87 -46.34

Last 12-M Retn(%)

N/A -52.53 22.86 23.45 -62.22

Top-Five Technology Sector Stocks--Long-Term Forecast Returns

Ticker
HPQ PTNR RIMM DELL GAME

Name
HEWLETT PACKARD PARTNER COMM RESEARCH IN MOT DELL INC SHANDA GAME-ADR

Mkt Price
19.52 3.97 7.5 12.23 3.69

Valuation(%)
-51.23 -49.16 82.31 -30.88 -36.28

Last 12-M Retn(%)

-38.9 -63.84 -72.15 -22.59 -26.49

Top-Five Technology Sector Stocks--Composite Score

Ticker
UIS NCR CSCO HPQ XRX

Name
UNISYS NCR CORP-NEW CISCO SYSTEMS HEWLETT PACKARD XEROX CORP

Mkt Price
20.86 22.72 19.02 19.52 7.34

Valuation(%)
-34.74 -22.84 -16.92 -51.23 -32.09

Last 12-M Retn(%)

12.45 30.05 20.76 -38.9 -8.71

Top-Five Technology Sector Stocks--Most Overvalued

Ticker
AMKR USMO JDSU PLXT FNSR

Name
AMKOR TECH INC USA MOBILITY JDS UNIPHASE CP PLX TECH INC FINISAR CORP

Mkt Price
5.34 10.97 11.84 5.84 14.91

Valuation(%)
300 300 300 300 300

Last 12-M Retn(%)

26.84 -22.8 -0.59 92.11 -7.91

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Free Report Download for Subscribers

As a bonus to our Free Weekly Newsletter subscribers, we are now offering a FREE DOWNLOAD of one of our $ 25.00 Detailed Valuation Reports.
This week's free download is our report on Goldman Sachs. (GS). Goldman Sachs is a global investment banking and securities firm, providing a full range of investing, advisory and financing services worldwide to a substantial and diversified client base, which includes corporations, financial institutions, governments, and high net worth individuals. Goldman dodged a bullet this week when it was announced that they would not face criminal charges for a variety of questionable practices related to mortgage-backed securities. The bank was under fire from the US Senate for selling customers products which it was also shorting and for not notifying customers that it was doing so. In addition, the SEC also declined to file charges against Goldman for allowing clients to pick and choose mortgages likely to fail into a product sold to other Goldman clients.

Weekly Subscribers can download a FREE Detailed Valuation Report on Goldman Sachs HERE
If you have not subscribed and want to be able to receive a FREE $ 25.00 Detailed Valuation Report, you can subscribe to our Free Weekly Newsletter HERE.

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What's HotFDIC Update is Posted

ValuEngine Chief Market Strategist Richard Suttmeier is an expert on the US Banking System and uses the health of the system as a leading economic indicator. He distills his thoughts on the banking system in our FDIC Report. The latest update of the report is now available. In his summary of the report he notes the following: Housing Starts for June rose a better than expected 6.9% to an annual rate of 760,000 units. The important Single-Family Starts rose 4.7% to an annual rate of 539,000. The July report from the National Association of Home Builders / Wells Fargo Housing Market Index (HMI), showed a strong rise of six points-- to 35, which is the largest one-month gain in nearly a decade. The HMI Index is now at its highest level since March of 2007. While these statistics are promising, remember that an HMI of 35 is still well below 50-which categorizes the market for new homes as poor. On July 25th, we learned that sales of newly built, single-family homes declined by 8.4% to a seasonally adjusted annual rate of 350,000 units in June. The inventory of new homes remains near a record low with 144,000 units, a very slim 4.9 month supply. The builders would like to add new inventory, but community banks remain reluctant to provide enough new construction and development loans to jump start supply. On August 1st, the Fed noted that the US economy decelerated in the first half of 2012 with slow growth in employment and with the unemployment rate elevated. One thing I always look for in a Fed Statement is what the Committee has to say about the housing market. The FOMC described the housing sector as improving, but noted that it remains depressed overall. Unfortunately, the Federal Reserve still refuses to aid this important segment of the US economy. The White House-- through the US Treasury, wants the Federal Housing Finance Agency (FHFA) to direct Fannie Mae and Freddie Mac to implement the Home Affordable Program Principal Reduction Alternative (HAMP PRA). To his credit, the Acting FHA Director Edward J. Demarco concluded that the anticipated benefits do not outweigh the costs and risks. The FHFA concluded that HAMP PRA did not clearly improve foreclosure avoidance while reducing costs to taxpayers relative to the approaches in place today.

If a home owner is underwater--one of the 24% of all mortgages, or is one of the 6% with less than 5% equity, selling that home becomes problematic. What sort of aid should be provided? There could be a program to over the forgiveness of principal, but that would not be in the best interest of the lender. One thing Congress could do to help underwater homeowners is to allow the out-of-pocket additional loan principal payment required to pay-off the mortgage be considered a long-term capital loss on federal taxes. Housing needs help to drive recovery and become the employment mainstay it has been in almost all recoveries since World War II. Our latest ValuEngine FDIC Report is now posted. The report contains loan exposure and/or ValuEngine datapoints on valuation, forecast, and ratings for all of the institutions on our List of Problem Banks. Subscribers can download it HERE. Others interested in the report may find out more on our website by clicking the image below.

Suttmeier Says
--Commentary and Analysis from Chief Market Strategist Richard Suttmeier
If you have any comments or questions, send them to Rsuttmeier@Gmail.com Treasury Yields 10-Year--(1.838) Quarterly, daily and annual value levels are 1.869, 1.886 and 2.502 with a semiannual pivot at 1.853, and weekly, monthly and semiannual risky levels at 1.586, 1.468 and 1.389. A weekly close with the yield above the five-week modified moving average at 1.600 favors higher yields. Thursdays high yield at 1.862 was a test of my semiannual value level at 1.853. Commodities and Forex Comex Gold ($1614.0) Annual, weekly and monthly value levels are $1575.8, $1573.6 and $1525.3 with a daily pivot at $1611.9, and semiannual and quarterly risky levels at $1616.6, $1643.3, $1702.5 and $1805.8. Below is my second annual risky level at $1388.4. The weekly chart stays positive on a weekly close above the five-week modified moving average at $1605.7. Nymex Crude Oil ($95.25) My monthly and semiannual value levels are $90.40 and $76.71 with daily and weekly pivots at $95.64 and, annual and quarterly risky levels at $103.58 and $107.63. The weekly chart stays positive on a weekly close above the five-week modified moving average at $89.87. The Euro (1.2356) My weekly value level is 1.2047 with monthly and daily pivots at 1.2237 and 1.2269. My semiannual value level is 1.1078 with a semiannual risky level at 1.2917. The weekly chart shifts to positive on a weekly close above the five-week modified moving average at 1.2395. Major Indices Daily Dow:(13,250) Annual and semiannual value levels are 12,312 and 10,738 with a weekly pivot at 13,118, and daily, monthly, annual and quarterly risky levels at 13,266, 13,625, 14,032 and 14,493. The weekly chart profile stays positive on a weekly close above the five-week modified moving average at 12,938.

S&P 500 (1415.5) My annual value level is 1363.2 with a weekly pivot at 1403.8, and daily and monthly risky levels at 1418.4 and 1458.2. My semiannual value level is 1059.7. The weekly chart profile stays positive on a weekly close above the five-week modified moving average at 1372.4. NASDAQ (3062) Annual and semiannual value levels are 2698 and 2527 with a weekly pivot at 3031, and daily, monthly and annual risky levels at 3068, 3194 and 3232. The weekly chart profile stays positive on a weekly close above the five-week modified moving average at 2948. NASDAQ 100 (NDX) (2768) Weekly, annual and semiannual value levels are 2714, 2603, 2300 and 2239 with daily and monthly risky levels at 2773 and 2877. The weekly chart profile stays positive on a weekly close above the five-week modified moving average at 2641. Dow Transports (5168) My semiannual value levels are 4449 and 4129 with daily and weekly pivots at 5118 and 5152, and monthly risky level at 5373. The weekly chart profile needs a weekly close above the five-week modified moving average at 5108 to turn positive. The all time high is 5627.85 set on July 7, 2011. Russell 2000 (813.08) My semiannual value level is 686.25 with a daily pivot at 812.92, and weekly, annual and monthly risky levels at 819.98, 836.15 and 846.16. The weekly chart profile stays positive with a weekly close above the five-week modified moving average at 792.42. The all time high is 868.57 set on May 2, 2011. The SOX (408.26) My weekly value level is 391.17 with daily, monthly and quarterly risky levels at 414.74, 420.20 and 450.28. The weekly chart profile stays positive on a weekly close above the five-week modified moving average at 384.34.

ValuEngine.com Tools and Services

We provide a variety of means for accessing ValuEngine market analysis and other content. You can find us on some of the leading financial media websites as well as the more popular social media services. While our own website ValuEngine.com provides access to lots of analysis--and you can always sign up to receive email daily and weekly bulletins HERE, some users prefer to download PDF reports of content while others prefer to garner info while browsing the web. Our Chief Market Strategist Richard Suttmeier is a prolific market observer and you can find his content in a variety of places. His weekly column on Forbes provides insights into his "Buy and Trade" strategy while his daily market analysis can be followed and accessed at Scribd, Twitter, and Minyanville. Senior Editor Steve Hach re-posts PDFs and web-accessible copies of Daily and Weekly ValuEngine bulletins at Seeking Alpha and Scribd. In most cases, you can receive notification of VE content posting by Suttmeier and Hach by following the ValuEngine feed on twitter @ValuEngine. Links for this content are provided below, you may also find these links on our website HERE Intelligent Investing with Richard Suttmeier Articles by Richard Suttmeier | Articles by Steve Hach Newsletters, Articles and Other Research Pieces Articles by Richard Suttmeier | Articles by Steve Hach Get short, timely messages from ValuEngine Inc Daily Bulletin PDFs, Weekly Newsletter PDFs, and PDF Research Reports