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ValuEngine Weekly January 14, 2011




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January 14, 2011
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!


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! 


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

VALUATION WATCH:  Our models find that overvaluation is approaching levels typically seen when a market correction is imminent. Overvalued stocks now make up almost 64% of our universe and almost 30% of the universe is calculated to be overvalued by 20% or more.  ALL Sectors are now calculated to be overvalued.

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 Rambus (NASDAQ:RMBS).   ValuEngine has issued a STRONG BUY recommendation for RAMBUS INC on Jan. 14, 2011. Based on the information we have gathered and our resulting research, we feel that RAMBUS INC has the probability to OUTPERFORM average market performance for the next year. The company exhibits ATTRACTIVE company size and market valuation.

  Based on available data as of Jan. 14, 2011, we believe that RMBS should be trading at $21.55. This makes RMBS 2.04% 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 RMBS, we base this on actual earnings per share (NYSEARCA:EPS) for the previous four quarters of $0.53, forecasted EPS for the next four quarters of -$0.38, and correlations to the 30- year Treasury bond yield of 4.49%.

  Rambus, Inc. designs, develops, licenses and markets highspeed chip-to-chip interface technology to enhance the
performance and cost-effectiveness of computers, consumer electronics and other electronic systems. The company licenses semiconductor companies to manufacture and sell memory and logic integrated circuits incorporating Rambus interface technology and markets its solution to systems companies to encourage them to design Rambus interface technology into their products.

  Subscribers can check out the latest figures on from our models HERE.  You can always screen for top-forecast stocks using our VE software package or our website.  Not a ValuEngine Premium Website member?  Then please consider signing up for our no obligation, two-week free trial today. 

Weekly Subscribers can download a FREE Detailed Valuation Report on Rambus (RMBS) 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
Week Open
Thurs. Close
% Change
11672.34 11731.9 59.56 0.51% 1.63%
2691.47 2735.29 43.82 1.63% 3.47%
784.51 800.65 16.14 2.06% 2.43%
S&P 500
1270.84 1283.76 12.92 1.02% 2.48%
ValuEngine Market Overview
Summary of VE Stock Universe
Stocks Undervalued
Stocks Overvalued
Stocks Undervalued by 20%
Stocks Overvalued by 20%


ValuEngine Sector Overview
Last 12-MReturn
P/E Ratio
Oils-Energy -0.19% 3.10% 3.10% 28.19% overvalued 35.79% 47.85
Basic Materials -1.18% -1.33% -1.33% 20.42% overvalued 44.47% 40.34
Auto-Tires-Trucks -0.17% 3.41% 3.41% 16.71% overvalued 36.79% 20.79
Multi-Sector Conglomerates -0.19% 2.69% 2.69% 15.61% overvalued 30.41% 35.76
Transportation -0.05% 1.30% 1.30% 15.07% overvalued 25.38% 28.71
Business Services 0.37% 3.12% 3.12% 14.23% overvalued 17.51% 33.11
Industrial Products -0.20% 1.44% 1.44% 12.87% overvalued 27.67% 32.34
Computer and Technology 0.13% 9.80% 3.79% 11.71% overvalued 35.83% 37.68
Aerospace -0.07% 3.06% 3.06% 8.69% overvalued 31.24% 18.82
Retail-Wholesale -0.08% -0.82% -0.82% 7.94% overvalued 24.52% 27.03
Finance -0.22% 0.76% 0.76% 7.54% overvalued 17.53% 28.05
Consumer Staples -0.12% 0.16% 0.16% 7.24% overvalued 17.90% 24.84
Utilities 0.26% 0.79% 0.79% 6.99% overvalued 13.34% 20.60
Consumer Discretionary 0.28% 0.97% 0.97% 6.44% overvalued 23.26% 30.66
Construction -0.10% 2.32% 2.32% 1.68% overvalued 9.90% 29.48
Medical -0.16% 2.41% 2.41% 0.48% overvalued 16.08% 36.10
  Sector Talk--Oils/Energy

  Below, we present top-five lists for the Oils/Energy Sector from our Institutional software package (Pending:VEI).  These results were filtered by market price and volume--no results below 3$/share or less than 100k shares/day.

Top-Five Oils/Energy Stocks--Short-Term Forecast Returns

Ticker Name Mkt Price Valuation(%) Last 12-M Retn(%)
LNG CHENIERE ENERGY 6.91 -74.75 104.44
FTK FLOTEK INDU INC 5.89 2.59 238.51
VRNM VERENIUM CORP 3.2 -75 -38.34
BPZ BPZ RESOURCES 5.09 -75 -33.9
XTXI CROSSTEX ENERGY 8.95 -43.1 25.88

Top-Five Oils/Energy Stocks--Long-Term Forecast Returns

Ticker Name Mkt Price Valuation(%) Last 12-M Retn(%)
LNG CHENIERE ENERGY 6.91 -74.75 104.44
BPZ BPZ RESOURCES 5.09 -75 -33.9
VRNM VERENIUM CORP 3.2 -75 -38.34
ENER ENERGY CONV DEV 4.39 -75 -61.01
SPWRA SUNPOWER CORP-A 13.9 -62.81 -44.44

Top-Five Oils/Energy Stocks--Composite Score

Ticker Name Mkt Price Valuation(%) Last 12-M Retn(%)
LDK LDK SOLAR CO 12.31 -36.27 61.97
SNP CHINA PETRO&CHM 101.36 4.96 21.37
EROC EAGLE ROCK EGY 9.28 -9.25 59.18
STR QUESTAR 17.87 -7.52 28.19
BP BP PLC 47.54 -16.89 -20.59

Top-Five Oils/Energy Stocks--Most Overvalued

Ticker Name Mkt Price Valuation(%) Last 12-M Retn(%)
SD SANDRIDGE ENRGY 7.83 300 -24.13
ATPG ATP OIL & GAS 16.84 269.44 -8.38
USU USEC INC 5.86 261.09 39.86
GLBL GLOBAL INDS LTD 7.22 202.99 -5.74
AREX APPROACH RESRCS 25.38 160.9 197.89

  Subscribers can check out the latest valuation, forecast, and ratings figures on Oils/Energy  from our Models HERE.

  Currently, you research more than 400 ADRs and other foreign stocks with ValuEngine's software and website! 

We also offer research reports on more than 700 Canadian Companies on our Research Report Web Page.


What's Hot

The ValuEngine FDIC Report

  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.


   Suttmeier remains bearish in his outlook for both US banks as well as the US housing market.


  In his summary of the report he notes the following:


  Because of the housing market depression and stress in the banking system the Unemployment Rate will stay above 9% for all of 2011.

   In FOMC Minutes released on January 4th, the Federal Reserve says that the economy will gradually pick up as unemployment declines slowly. The Fed sees signs that inflation is starting to rise as higher energy costs are being passed through to consumers. The Fed agrees with me in that home prices will continue to decline, as the housing market remains depressed.


  You can not have a sustained economic recovery without the real estate markets and without healthy community banks helping Main Street USA recover and we simply do not have that backdrop.


  A critical portion of this report is the ValuEngine List of Problem Banks.  Problem banks are publicly traded FDIC insured financial institutions who are overexposed to Construction & Development Loans and/or Nonfarm nonresidential real estate loans, with “1-Engine”--Strong Sell, or “2-Engine”—Sell.  The report also includes a listing of all other engine-rated banks-- and those with “n/a” ratings but forecast figure data points according to our models-- in violation of FDIC guidelines vis-a-vis loan exposures.

   As of January 13, 2011, there were 231 banks overexposed to C&D and/or CRE loans in the ValuEngine database with full data coverage. There were three additional overexposed banks with partial data coverage.

   Of the overexposed banks with full data coverage, 54 were rated “1-Engine” Strong Sells, 55 were rated “2-Engine” Sells, 100 were rated “3-Engine” Holds, and 22 were rated a “4-Engine” Buy. There were no Strong Buy-rated banks on the list

   This means that there are currently 109 banks rated Sell or Strong Sell that are also overexposed to C&D and/or CRE loans.

   There are 290 additional institutions listed as a problem bank list that do not appear in the ValuEngine database but are carrying C&D and/or CRE loans in excess of the FDIC guidelines.

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.

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


ValuEngine Chief Market Strategist Richard Suttmeier On the Road in January

  ValuEngine Chief Market Strategist Richard Suttmeier is a financial analyst for media such as Fox News, CNBC,YahooFinance,the Wall Street Journal, New York Times, CNNfn, and Bloomberg, Suttmeier has long been one of ValuEngine's "power users," supporting his own technically-focused analysis with VE's fundamentally-based quant methods. 

   With all of the recent market uncertainties, making the correct stock decisions can be daunting.  ValuEngine Chief Market Strategist Richard Suttmeier will be appearing at the AAII Orlando Chapter meeting on January 19, 2011.  We invite all VE clients in Florida to attend.  At the meeting, Suttmeier will discuss the following topics:

  • How can help investors adapt to volatile and risky market conditions
  • How to implement a hedge fund-type strategy for your own stock investment portfolio
  • How ValuEngine’s research helped me call both the top and the bottom of the market over the past five years


   This meeting will take place at the University Club of Winter Park, 841 N. Park Ave. Winter Park, FL 32789.  It starts at 6:30pm.  Again, all VE clients are invited.  We place a special call out to those seeking individual investment advice, assistance, and portfolio management. 


 An archive of this weekly newsletter is available here.

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