December 9, 2011

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The ValuEngine Weekly is an Investor Education newsletter focused on the quantitative approach to investing and the tools available from ValuEngine.com. In today's fast-moving and globalized financial markets, it is easy to get overloaded with information. The winners will adopt an objective, scientific, independent and unemotional approach to investing. If you are not yet a member of ValuEngine's stock analysis service, sign up now for a two-week free trial at www.valuengine.com!

MARKET OVERVIEW

Index
DJIA NASDAQ RUSSELL 2000 S&P 500

started week
12021.46 2666.47 743.64 1244.33

Thursday Close
11997.7 2596.38 722.68 1234.35

4 day change
-23.76 -70.09 -20.96 -9.98

4 day change %
-0.20% -2.63% -2.82% -0.80%

ytd
4.57% N/A -6.74% -0.91%

Summary of VE Stock Universe

Stocks Undervalued Stocks Overvalued Stocks Undervalued by 20% Stocks Overvalued by 20% 76.44% 23.56% 40.50% 10.91%

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
-2.31% -2.92% -3.48% -2.32% -2.64% -2.92% -2.70% -1.75% -2.48% -2.71% -2.64% -2.60% -2.70% -1.70% -2.19% -2.00%

MTD
-1.86% 0.31% -2.11% -1.26% 0.14% -0.71% -0.30% 0.61% -0.26% -0.62% -1.83% -1.30% -2.12% 0.30% -0.52% -2.10%

YTD
-4.35% -29.44% -21.87% -3.60% -8.09% -22.25% -11.87% -14.22% -8.52% -11.32% -6.13% -14.34% -17.97% -2.02% -15.70% 1.27%

Valuation
1.12% undervalued 13.95% undervalued 6.37% undervalued 5.91% undervalued 3.44% overvalued 11.43% undervalued 10.04% undervalued 4.15% overvalued 8.28% overvalued 8.84% overvalued 8.95% overvalued 3.74% undervalued 0.33% overvalued 3.28% overvalued 2.07% undervalued 7.34% overvalued

Last 12MReturn
-7.39% -6.72% -17.24% 2.96% -1.21% -19.34% -3.85% -2.55% -5.47% -6.79% 29.17% -8.74% -9.36% 1.82% -17.05% 3.65%

P/E Ratio
15.36 22.48 29.44 28.13 35.28 37.42 22.42 18.44 19.74 23.19 27.66 14 33.57 21.83 28.81 23.71

Sector TalkTechnology and Computers

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

Ticker
RNWK CALX AMSC QPSA YOKU

Name
REALNETWORKS CALIX INC AMER SUPERCON QUEPASA CORP YOUKU.COM- ADR

Mkt Price
7.37 6.71 3.95 3.58 19.05

Valuation(%)
-59.11 -60.6 -70.38 -75 -26.43

Last 12-M Retn(%)

-48.39 -57.48 -88.06 -62.32 -43.03

Top-Five Tech Stocks--Long-Term Forecast Returns

Ticker
RNWK CALX AMSC YOKU QPSA

Name
REALNETWORKS CALIX INC AMER SUPERCON YOUKU.COM- ADR QUEPASA CORP

Mkt Price
7.37 6.71 3.95 19.05 3.58

Valuation(%)
-59.11 -60.6 -70.38 -26.43 -75

Last 12-M Retn(%)

-48.39 -57.48 -88.06 -43.03 -62.32

Top-Five Tech Stocks--Composite Score

Ticker
STX NCR MSI DELL AAPL

Name
SEAGATE TECH NCR CORP-NEW MOTOROLA SOLUTN DELL INC APPLE INC

Mkt Price
15.7 16.39 46.78 15.5 390.66

Valuation(%)
-34.91 -50.21 -39.01 -22.42 -14.6

Last 12-M Retn(%)

7.9 12.26 39.52 13.3 21.7

Top-Five Tech Stocks--Most Overvalued

Ticker
ROG ACIW XRIT JDSU FNSR

Name
ROGERS CORP ACI WORLDWIDE X-RITE JDS UNIPHASE CP FINISAR CORP

Mkt Price
39.86 28.94 4.57 10.39 16.1

Valuation(%)
300 300 300 300 300

Last 12-M Retn(%)

13.5 6.32 3.16 -20.08 -32.89

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What's Hot-The ValuEngine Aggressive Growth Portfolio Strategy

ValuEngine has created and tracked a variety of investment portfolio strategies which reflect varying investment objectives. Known as benchmark portfolio strategies, these strategies provide an excellent starting point for using ValuEngine's cutting-edge research to select a basket of stocks. A research team of Ivy League academics and Wall St. investment professionals created ValuEngine's proprietary financial models and investment tools. This four-year effort required a team of 12 PhDs and a budget of more than $4 million. Each ValuEngine model takes a view of the market from a different perspective and then the various outputs are combined in order to rate and rank each ticker in our universe of 5000 stocks--of which @ 500 are ADRs and foreign companies that trade on US exchanges. The two main models utilize complex mathematical modeling

formulas as well as computer simulation techniques to compute what stock prices should be if the market were totally rational and efficient and what stock prices will be given the actual state of the market today. This week, we discuss one of our longest-running strategies, the VE Aggressive Growth Portfolio Strategy. Formerly known as the VE Standard Strategy, VE Aggressive Growth is designed to provide maximum returns. It selects stocks for portfolios based on calculations on stock valuation supplied by ValuEngine's proprietary stock valuation model as well as other fundamental financial data. Over time, this strategy is highly successful when run in a market neutral configuration. The VE Aggressive Growth Portfolio Strategy is based on the proprietary VE Composite Score Ranking system. This ranking system is designed to assess the attractiveness of each of the more than 5000 stocks in our database. The VE Composite Score Ranking system combines the following three factors: stock valuation, price momentum, and earnings/price ratio. Each of these quantitative measurements are ranked on a scale of 1 to 100. The higher the ranking, the more positive the influence each measurement has on the overall attractiveness of the stock. The sum of the three rankings forms the VE Composite Score Ranking. Stocks with the highest scores are selected for the long side of the ValuEngine Aggressive Growth Portfolio. Stocks with the lowest scores make up the short picks. No diversity criteria are applied and thus the strategy is free to create a portfolio without sector limits in a search for maximum total return. This strategy allows better overall gains but does result in an increase in volatility as the portfolios may be significantly over or underweighted on a sector basis depending on valuation and other calculations at the time of portfolio selection. Rebalancing occurs once per month. An equal amount of capital is allocated to all stocks. Only stocks with a market price greater than $5 and a size ranking greater than 40--@ $483 millions in January 2011, are considered. Performance table and chart are below:
Statistics vs. S&P 500 Index Since 2000

VE Portfolio S&P 500 Ann Return 23.35% 0.88% Ann Volatility 27.51% 16.40% Sharpe Ratio 0.78 -0.06 Sortino Ratio 1.12 -0.07 Max Drawdown -65.92% -52.56%

Currently on our website, you can find screening tools for four Benchmark Portfolio Strategies: the VE Aggressive Growth Portfolio Strategy, the VE Diversified Growth Portfolio Strategy--formerly know as the "VE Forecast," the VE Top-Rated Portfolio Strategy, and the VE Income Strategy--we will soon add the VE International Strategy (discussed last week) as well. To View Current Holdings and Performance Tracking of our VE Benchmark Portfolio Strategies,CLICK HERE These strategies feature stocks selected according to specific criteria designed to meet the overall strategy goals for return and risk. All selections are based on calculations made by ValuEngine's proprietary stock valuation and forecast models as well as additional fundamental datamarket capitalization, e/p ratio, momentum, dividend scheduleswhere applicable, as well as other factors. You can always check out the performance of our benchmark portfolio strategies on our website by going to the ValuEngine Portfolios page. HERE you can view the current and historic holdings of the portfolio and view performance data. You can run the strategies for yourself and get baskets of stocks selected with up-to-

the-day market data by going to our VE Benchmark Portfolios screening page HERE. By running your own screens for the strategies, you can re-balance your portfolio according to your own needs. To Screen for Your Own Portfolio using our VE Benchmark Portfolio Strategies, CLICK HERE Custom feeds of our benchmark strategies in long only, market neutral, and other derivations as well as historical data and in-depth tracking information are available to ValuEngine customers for additional fees. Our research and development team is fast, agile, and experienced and can deploy the power of ValuEngine's proprietary models to help you develop a customized strategy and achieve your investment goals. In addition, we are currently testing and developing several additional strategies. To learn more, contact us at support@ValuEngine.com.

If you would prefer to auto-trade these strategies, please contact us to put the power of ValuEngine to work for you at our new fullservice money management firm
Info@VECapitalManagement.com (321) 215-4015 (610) 896-8823

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--(1.972) Daily, weekly, semiannual, quarterly and annual value levels are 2.095, 2.1325, 2.203, 2.414, 2.669 and 2.690 with the 50-day simple moving average at 2.058, and semiannual and monthly risky levels at 1.672 and 1.602.

Commodities and Forex Comex Gold--($1712.2) Semiannual and annual value levels are $1469.9, $1644.8 and $1,356.5 with my quarterly pivot at $1738.4, and daily, weekly and monthly risky levels at $1748.8, $1808.4 and $1873.8, and the September 6th all time high at $1923.7. The 50-day simple moving average is a support at $1709.1. The years low was $1535.0 set on September 26th. Nymex Crude-- (($97.97) The October 4th year-to-date low is $74.95 with a monthly value level at $86.20, the 200-day simple moving average at $96.01, quarterly, monthly and annual pivots at $100.34, $99.91 and $101.92, and weekly, semiannual risky levels at $107.75, $103.93 and $107.90. The high and low for oil happened on the same days as the Dow with the high at $114.83 per barrel on May 2nd. The Euro--(1.3346) My quarterly value level is 1.2598 with a daily pivot at 1.3466, the 50day simple moving average at 1.3603, and weekly, monthly and semiannual risky levels at 1.3944, 1.3953, 1.4752 and 1.4872. Major Indices Equity Technicals The 30 stocks in the Dow Industrial Average closed Thursday above its 200-day simple moving average at 11,945. All other major averages closed below their 200day SMAs. Yesterday I talked about the three important indices and their failed attempts at closes above their 200-day SMAs. The S&P 500 (with 500 stocks) recently tested its 200-day at 1263.6 but failed to close above. The same can be said about the NASDAQ (with 2,500 stocks) versus its 200-day at 2671. The Russell 2000 (with 2000 small cap stocks) have stayed well below its 200-day, now at 768.26. These 5,000 stocks outweigh the 30 Dow components. Equity Fundamentals: Stocks are not as compelling fundamentally. Stocks are undervalued, but 76.4% is well below the October 4th 93.5% level. 76.4% of all stocks are undervalued / 23.6% of all stocks are overvalued. On October 4th 93.5% of all stocks were undervalued. Eight sectors are overvalued and eight sectors are undervalued in a range from 14.0% undervalued to 9.0% overvalued. Back in March 2009 the sectors were undervalued by 33% to 45%.

Key Levels for the Major Equity Averages Dow --(11,998) The 200-day simple moving average is 11,945. Monthly, annual, and semiannual value levels are 11,794, 11,491, 9,635 and 8,468 with daily, quarterly, weekly, and annual risky levels at 12,495, 12,507, 12,650 and 13,890. The October 4th low was 10,404.49 with the May 2nd high at 12,876.00. S&P 500--(1234.4) The October 4th YTD low is 1074.77 with annual and monthly value levels at 1210.7 and 1211.8, the 200-day at 1263.6, semiannual value levels at 981.3 and 855.7, and daily, quarterly, weekly and annual risky levels at 1291.1, 1303.7, 1317.4 and 1562.9. The YTD high is 1370.58. NASDAQ (2596) The October 4th YTD low is 2298.89 with monthly, and annual value levels at 2588 and 2335, semiannual value levels at 2199 and 2049, the 200-day at 2671, and daily, weekly and quarterly risky levels at 2703, 2782 and 2807, and the YTD high at 2887.75. My annual risky level is 3243. NASDAQ 100 (NDX) (22283) The YTD low is 2034.92 with a monthly value level at 2282, the 200- day at 2291, semiannual value levels at 1951 and 1861, and daily, weekly and quarterly risky levels at 2365, 2426, 2434 and 2440, the YTD high at 2437.42, and my annual risky level at 2590. Dow Transports (4864) The October 4th YTD low is 3950.66 with monthly and semiannual value levels at 4752, 4335 and 3868, the 200-day at 4985, and daily, annual, weekly and quarterly risky levels at 5139, 5179, 5294 and 5359, and the YTD high / all time high at 5627.85 on July 7th. Russell 2000 (722.69) The October 4th YTD low is 601.71 with a monthly value level at 695.30, semiannual value levels at 577.47 and 530.04, the 200day at 768.26, and daily, weekly, annual and quarterly risky levels at 768.26, 795.55, 784.16 and 802.96, and the YTD high / all time high at 868.57 on May 2nd. The SOX (371.13) The October 4th YTD low is 322.24 with a monthly value level at 343.57, an annual value levels at 270.98, the 200-day at 396.47 and daily, weekly and quarterly risky level at 390.49, 398.13 and 417.63, and the YTD high at 450.79.

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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