October 21, 2010 ATTENTION Advanced Investors and Finance Professionals: If you are reading this you should download ValuEngine Institutional Software to see how VE’s powerful quantitative tools can increase your productivity and effectiveness. | Seeking Alpha Readers should check out our Seeking Alpha VE Investment App HERE. Flying High Again Positive News from Airlines Leads to Gains for ValuEngine Forecast 22 Newsletter Picks AMR and LCC Subscribers to our ValuEngine Forecast 22 Market Neutral Strategy Portfolio Newsletter got a nice surprise yesterday 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 @17% and 10% since our rebalance on Friday of last week. Our 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 US Airways with short term gains followed up by negative one and two-year forecast figures. The model gets increasingly pessimistic after three months. For AMR Corp., the longer-term picture is far more attractive with positive forecasts across the board-- and a whopping 41.8% giant projected for the three-year timeframe. Subscribers can check out the latest figures on US Airways, AMR Corp, and the Airline Industry from our models HERE Seeking Alpha Readers should check out our Seeking Alpha VE Investment App HERE. For more on the VE Forecast 22 Market Neutral Strategy Newsletter Portfolio, Click the Logo Below Market Indices Data | Latest | Change | YTD | Dow Jones | 11,137.60 | 29.66 | 6.81% | NASDAQ Composite | 2,457.12 | -0.27 | 8.28% | Russell 2000 | 699.48 | -2.63 | 10.32% | S&P 500 | 1,179.52 | 1.35 | 5.78% | ValuEngine Market Overview Summary of VE Stock Universe | Stocks Undervalued | 57.74% | Stocks Overvalued | 42.26% | Stocks Undervalued by 20% | 26.59% | Stocks Overvalued by 20% | 14.55% | ValuEngine Sector Overview Sector | Change | MTD | YTD | Valuation | Last 12-MReturn | P/E Ratio | Energy | 1.24% | 3.77% | 8.77% | 6.04% overvalued | 20.96% | 25.05 | Basic Industries | 1.80% | 2.30% | 24.09% | 5.13% overvalued | 34.70% | 25.36 | Public Utilities | 1.10% | 3.02% | 2.60% | 2.46% overvalued | 13.20% | 20.20 | Transportation | 1.35% | 4.15% | 14.38% | 0.77% undervalued | 17.31% | 19.19 | Consumer Non-Durables | 0.64% | 3.29% | 10.73% | 1.61% undervalued | 18.95% | 17.06 | Capital Goods | 1.29% | 4.00% | 20.85% | 3.90% undervalued | 14.56% | 21.63 | Finance | 0.90% | 3.70% | 13.89% | 5.42% undervalued | 7.56% | 18.10 | Consumer Services | 0.84% | 2.98% | 13.59% | 5.66% undervalued | 11.69% | 21.43 | Technology | 0.93% | 4.19% | 21.00% | 5.90% undervalued | 21.70% | 24.64 | Consumer Durables | 0.43% | 3.29% | 16.23% | 8.18% undervalued | 22.90% | 19.69 | Health Care | 0.77% | 3.13% | 22.70% | 10.33% undervalued | 5.44% | 20.61 | |