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Steve Hach is the Senior Editor at ValuEngine.com, a Newtown, Pennsylvania-based stock valuation and forecast service. ValuEngine utilizes Ivy League financial research as the basis for its coverage of more than 7000 US, Japanese, and Canadian, and other foreign stocks. Hach utilizes... More
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  • ValuEngine Free Weekly Newsletter is Released 0 comments
    Oct 22, 2010 1:24 PM | about stocks: GE, AAL, AAL, XJT, CEA, ZNH, LUV, ERJ, UAUA, AAWW, AER, FLY, LFL, SKYW

     

     

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    October 22, 2010
    The ValuEngine Weekly is an Investor Education newsletter focused on the quantitative approach to investing and the tools available from ValuEngine. 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!

     

    ATTENTION Investors and Finance Professionals:
    If you are reading this you should sign up for ValuEngine's award-winning stock valuation and forecast service at the low price of $19.95/month! 
    NO OBLIGATION, Two Week FREE TRIAL!

    CLICK HERE!

    If the tables in this email do not display properly, please CLICK HERE to download the newsletter.

    Seeking Alpha Readers should check out our Seeking Alpha VE Investment App HERE.

      Bonus for Readers
    --Free Individual Stock Report for Weekly Newsletter 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 GENERAL ELECTRIC (GE).   In our Free Weekly Newsletter last week, we focused on alternative/modern energy and noted that not all companies that were big players in the field were categorized within the industry for screening purposes.  One poster child for that tip is the mega-conglomerate GENERAL ELECTRIC (GE)

      GENERAL ELECTRIC (GE) operates as a technology, media, and financial services company worldwide.  GENERAL ELECTRIC produces a variety of "green" items including refrigeration and cooling systems, light bulbs, wind turbines, and other "traditional" alt energy favorites.  The company also produces a variety of higher efficiency jet engines and other environmentally beneficial items.  The company has been dumping research dollars into these fields and they are a bright spot when compared to its troubled finance operations, its media arm, etc.

     ValuEngine has issued a STRONG BUY recommendation for GENERAL ELECTRIC. Based on the information we have gathered and our resulting research, we feel that GENERAL ELECTRIC has the probability to OUTPERFORM average market performance for the next year. The company exhibits ATTRACTIVE company size, volatility and market valuation.

      Based on available data as of Oct. 22, 2010, we believe that GE should be trading at $19.37. This makes GE 16.87% undervalued. Fair Value indicates what we believe the stock should be trading at today if the stock market were perfectly efficient and everything traded at its true worth. For GE, we base this on actual earnings per share (EPS) for the previous four quarters of $1.09, forecasted EPS for the next four quarters of $1.22, and correlations to the 30- year Treasury bond yield of 3.94%.

      Although the stock is not as cheap as it was back in 2008, at $16 it is still a long way from its 2000 peak of @$60. 

      Website Subscribers can check out the latest figures on GENERAL ELECTRIC from our models HERE

    Weekly Subscribers can download a FREE Detailed Valuation Report on GE 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.

    ValuEngine Index Overview
    Index
    Week Open
    Thurs. Close
    Change
    % Change
    YTD
    DJIA
    11062.71 11146.6 83.89 0.76% 6.89%
    NASDAQ
    2470.12 2459.67 -10.45 -0.42% 8.40%
    RUSSELL 2000
    703.16 698.12 -5.04 -0.72% 10.10%
    S&P 500
    1176.83 1180.26 3.43 0.29% 5.84%
    ValuEngine Market Overview
    Summary of VE Stock Universe
    Stocks Undervalued
    55.27%
    Stocks Overvalued
    44.73%
    Stocks Undervalued by 20%
    25.25%
    Stocks Overvalued by 20%
    16%

     

    ValuEngine Sector Overview
    Sector
    Change
    MTD
    YTD
    Valuation
    Last 12-MReturn
    P/E Ratio
    Energy
    -0.76%
    3.07%
    8.12%
    8.27% overvalued
    19.96%
    24.93
    Basic Industries
    -0.86%
    1.59%
    23.24%
    6.63% overvalued
    34.12%
    25.15
    Public Utilities
    -0.53%
    2.50%
    2.06%
    3.88% overvalued
    13.04%
    20.10
    Transportation
    -0.43%
    3.77%
    13.98%
    0.89% overvalued
    18.93%
    20.20
    Consumer Non-Durables
    -0.20%
    3.12%
    10.63%
    0.17% overvalued
    19.23%
    17.04
    Capital Goods
    -0.18%
    3.86%
    20.67%
    1.73% undervalued
    15.55%
    21.71
    Finance
    -0.43%
    3.33%
    13.51%
    4.07% undervalued
    8.03%
    17.97
    Technology
    -0.32%
    4.08%
    21.25%
    4.31% undervalued
    21.81%
    24.56
    Consumer Services
    -0.28%
    2.75%
    13.34%
    4.46% undervalued
    12.51%
    21.39
    Consumer Durables
    -0.04%
    3.27%
    16.27%
    6.26% undervalued
    23.27%
    19.71
    Health Care
    -0.55%
    2.55%
    22.09%
    8.73% undervalued
    6.74%
    20.53

     

    Industry Talk--Airlines

      Subscribers to our ValuEngine Forecast 22 Market Neutral Strategy Portfolio Newsletter got a nice surprise this week as current long selections AMR Corp/American Airlines (AMR) and US Airways (LCC) reported good numbers for Q3.  Shares in both carriers jumped up 7% and 13% following the news.  Currently, the tickers are up @15% and 10% since our rebalance on Friday of last week.

      Our Forecast Model has done pretty well with airline stocks over the past year or so, topped off by a whopping 202% gain in UAUA as the model selected that stock back in November 2009 just as the airlines emerged from their fuel price shocks and the worst of the recession.  Airlines have been increasingly profitable thanks to reduced fuel costs, increased travel, the creation of additional revenue streams (such as the hated checked baggage fees) and various adjustments to routes and scheduling which have boosted efficiency and reduced empty seats.

      Looking ahead, our Forecast model sees a muddy picture for Airlines and currently finds no buy-rated tickers within the industry.  This means that long-term prospects--which make up the bulk of the rating, are not promising.  For the short-term, however, the model finds several decent prospects. 

     Subscribers can check out the latest figures on US Airways, AMR Corp, and the Airline Industry from our models HERE

    For more on the VE Forecast 22 Market Neutral Strategy Newsletter Portfolio, Click the Logo Below

      Below, we present various top-five lists for the Airline Industry from our Institutional software package (VEI).  

    Top-Five Airline Stocks--Short-Term Forecast Returns

    Ticker Name Mkt Price Valuation(%) Last 12-M Retn(%)
    XJT EXPRESSJET HLDG 6.72 -75 75
    CEA CHINA EASTERN AIRLINES 'H' 31.58 -75 114.25
    AMR AMR CORP 7.24 -49.73 7.26
    LCC US AIRWAYS GRP 10.75 -60.88 177.78
    ZNH CHINA SOUTHERN AIRLINES CO LTD 36.9 -70.79 134.29

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

    Ticker Name Mkt Price Valuation(%) Last 12-M Retn(%)
    AMR AMR CORP 7.24 -49.73 7.26
    LUV SOUTHWEST AIR 13.62 -10.49 54.25
    CEA CHINA EASTERN AIRLINES 'H' 31.58 -75 114.25
    ERJ EMBRAER AIR-ADR 28.36 28.17 23.73
    XJT EXPRESSJET HLDG 6.72 -75 75

    Top-Five Airline Stocks--Composite Score

    Ticker Name Mkt Price Valuation(%) Last 12-M Retn(%)
    LCC US AIRWAYS GRP 10.75 -60.88 177.78
    UAUA UAL CORP 23.66 -43.9 156.62
    LUV SOUTHWEST AIR 13.62 -10.49 54.25
    AAWW ATLAS AIR WORLD 53.37 -15.02 47.8
    CEA CHINA EASTERN AIRLINES 'H' 31.58 -75 114.25

    Top-Five Airline Stocks--Most Overvalued

    Ticker Name Mkt Price Valuation(%) Last 12-M Retn(%)
    DLAKY LUFTHANSA -ADR 20.85 66.77     N/A
    AER AERCAP HLDGS NV 12.69 65.48 50.36
    FLY FLY LEASING LTD 13.27 51.89 50.8
    LFL LAN CHILE-ADR 30.49 33.42 126.19
    SKYW SKYWEST INC 14.89 29.1 -4.61

    Seeking Alpha Readers should check out our Seeking Alpha VE Investment App HERE.

       

     An archive of this weekly newsletter is available here.

     
     
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    Disclosure: no positions
    Themes: airlines Stocks: GE, AAL, AAL, XJT, CEA, ZNH, LUV, ERJ, UAUA, AAWW, AER, FLY, LFL, SKYW
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