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ValuEngine Weekly October 15, 2010




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October 15, 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!


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  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 INTEL CORP (NASDAQ:INTC). Despite reporting strong earnings earlier this week and sparking a market rally, INTC shares were down as of this writing.  However, INTEL CORP has been trading in a range that has been exploited for several decent gains by our Chief Market Strategist Richard Suttmeier as part of his ValuTrader Portfolio Newsletter.  Suttmeier often buys INTEL CORP at $18-19 and then sells it at $21 or so.

  Based on the information we have gathered and our resulting research, we feel that INTEL CORP has the probability to OUTPERFORM average market performance for the next year. The company exhibits ATTRACTIVE company size, volatility and P/E ratio.

  Based on available data as of Oct. 15, 2010, we believe that INTC should be trading at $22.9. This makes INTC 15.65% 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 INTC, we base this on actual earnings per share (NYSEARCA:EPS) for the previous four quarters of $1.84, forecasted EPS for the next four quarters of $1.84, and correlations to the 30- year Treasury bond yield of 3.90%.

  INTEL CORP is one of the largest semiconductor chip makers. The Company develops advanced integrated digital technology products--primarily integrated circuits, for industries such as computing and communications. Intel designs and manufactures computing and communications components, such as microprocessors, chipsets, motherboards, and wireless and wired connectivity products, as well as platforms that incorporate these components. INTEL CORP sells its products primarily to original equipment manufacturers, original design manufacturers, PC and network communications products users, and other manufacturers of industrial and communications equipment. INTEL CORP is based in Santa Clara, California.

Weekly Subscribers can download a FREE Detailed Valuation Report on Intel Corporation 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
DJIA 11006.93 11096.92 89.99 0.82% 6.39%
NASDAQ 2403.46 2435.38 31.92 1.33% 6.14%
RUSSELL 2000 693.68 704.69 11.01 1.59% 12.19%
S&P 500 1165.32 1173.81 8.49 0.73% 5.13%
ValuEngine Market Overview
Summary of VE Stock Universe
Stocks Undervalued
Stocks Overvalued
Stocks Undervalued by 20%
Stocks Overvalued by 20%


ValuEngine Sector Overview
Sector Change MTD YTD Valuation Last 12-MReturn P/E Ratio
Energy -0.25% 6.56% 11.73% 8.81% overvalued 25.35% 25.14
Basic Industries -0.57% 2.58% 24.26% 7.80% overvalued 34.75% 25.16
Public Utilities -0.11% 2.89% 2.45% 3.27% overvalued 13.18% 20.10
Consumer Non-Durables 0.03% 3.45% 10.73% 0.29% overvalued 18.79% 17.11
Transportation -0.41% 3.56% 13.64% 0.09% overvalued 15.73% 19.12
Capital Goods -0.11% 4.08% 20.59% 2.72% undervalued 13.36% 21.61
Consumer Services -0.40% 3.45% 14.26% 3.71% undervalued 12.06% 21.68
Technology 0.03% 4.41% 21.46% 4.03% undervalued 20.45% 24.64
Finance -0.23% 3.19% 15.18% 4.45% undervalued 4.94% 18.17
Consumer Durables -0.59% 3.67% 16.59% 6.37% undervalued 21.94% 19.78
Health Care -0.30% 3.14% 22.98% 8.77% undervalued 4.28% 20.50


Industry Talk--Modern Energy
Featuring Michele Ashby, CEO, MINE LLC

  For this week's Industry Talk, we asked Michele Ashby, CEO of MINE LLC, for her thoughts on the prospects of the alternative energy industry.  Ashby, an analyst who spent the bulk of her career focusing on mining companies and precious metals like gold, now provides services to analysts, investors, bankers, and companies in the mining, modern energy, and oil and gas industries. 

  Ashby's company, MINE LLC, provides networking, capital raising, and educational opportunities several times a year via conferences held in outstanding natural settings such as Wyoming, Colorado, etc.  We were lucky to attend a MINE conference in Dillon, Colorado a few years ago and it was an edifying and worthwhile experience in all aspects. 

  For more on Ashby, MINE LLC, and their services for analysts, companies, and bankers seeking investment opportunities, go to the MINE LLC Website HERE

  Many use the term alternative energy, you use "modern energy."  What is "modern energy" and how does it differ from "alternative energy?"

  I use modern energy because it is more inclusive of the sector.  As we move into the future and new developments arise, we want to be sure to include new ideas, technologies, solutions, and applications in the energy world.  Let’s face it, we will need ALL of the energy sources we can capture and use.  Growth rates are expected to be enormous as the population of the planet earth grows and multiplies.  This will create more demand for energy and for All types of energy albeit fossil fuel or not.  Think of your home in 10 years and if you can imagine you will most likely have some type of solar support unit, waterless toilets, fuel cell storage, electric car feeding and taking energy from the grid and all kinds of things which will cut back on your energy use, yet keep your life as comfortable as it is today with  a lower carbon footprint.  Our goal should always be to add or improve our energy usage with  a lower carbon footprint.  As they say “there is no planet B!”

  Do you feel that US federal, state, and local policy makers are supporting modern energy effectively or do you feel like some--eg Tom Friedman--that the US is missing the next big economic engine while nations like China position their economies to prosper?

  There are many problems here in regards to our policies and how they affect the sector.  One of the things I hear most is that the US needs to set longer time lines on the incentive programs-- like 10 or 20 years.  Without that longevity, projects have a hard time getting and keeping consistent large-scale funding from investors.  Another factor that is discussed a lot is feed-in tariffs which have been very successful in Europe-- particularly in Germany.  Lastly, the failure to price carbon in the US has really taken the wind out of the sails when it comes to creating wealth and jobs in this sector.  There are many challenges we face here and we are only hurting our own progress by not implementing some of these ideas.

  Given the hype and subsequent bubble burst with alt energy stocks during the oil price run up of a few years ago, what can you say to investors who may be reticent to come back into the alt energy stocks?

  That there are even better opportunities now because the companies have had to really work hard to stay alive in the past couple of years.  Many of them did not survive what is being called “the valley of death” since the economy cratered.  The alternative energy sector was being held up by huge investors looking for those tax incentives to off-set their incredible earnings from 2005-2008.  Now that those big investors are not searching for tax incentive investments, the alternative energy businesses--especially the renewables-- have had to become much more cost effective to compete with utility pricing of electricity.  This turns out to be a good thing for consumers as the price of wind and solar has dropped dramatically.  As for investments in companies, we still carefully do our due diligence on each firm to evaluate what they are producing, the ROI (if not now, when?), and other measures of sustainability.

 For More on Investing and Modern Energy from Michele Ashby,
Click the Cover Below


  Below, we present various top-five lists for the Alternative Energy Industry from our Institutional software package (VEI).  We did not filter our results.  Keep in mind that many more firms are involved in the industry even if they are not classified as such.   It is always good to run individual ticker searches for firms identified as participating in fields like geothermal, wind, solare, batteries, etc. in addition to the industry screen.

Ticker Name Mkt Price Valuation (%) VE Rating Last 12-M Retn(%) Forecast 1-Month Retn(%) Forecast 1-Yr Retn(%) P/E Ratio
BIOF BIOFUEL ENERGY 2.77     N/A 4 125.2 2.79 9.16     N/A
CBEH CHINA INTEG EGY 8.37 -2.93 3 10.13 1.25 3.27 7.13
CSOL CHINA SOLAR & CLEAN ENERGY SOLUT 0.34     N/A 4 -31 1.14 12.16 0.96
CSUN CHINA SUNERGY 4.75 -20.15 4 11.24 2.14 8.92 8.37
ECTY ECOTALITY INC 4.4 -30.77 3 -59.26 1.38 0.84     N/A
EEE EVERGREEN ENERGY INC 1.26 -75 4 -82.2 2.15 7.74     N/A
ESLR EVERGREEN SOLAR 1.09 -70.22 4 -40.11 2.78 10.68     N/A
FCEL FUELCELL ENERGY 1.18 -75 4 -70.57 2.16 5.23     N/A
GPRE GREEN PLN RENEW 11.91 4.58 4 68.46 1.88 8.16 6.28
GU GUSHAN ENVIRMNT 1.02     N/A 3 -42.05 0.08 3.9     N/A
HW HEADWATERS INC 3.69 85.98 3 -14.39 0.81 -1.89     N/A
JASO JA SOLAR HOLDGS 9.55 -30.16 5 134.64 3.06 14.08 11.15
LDK LDK SOLAR CO 12.35 -36.04 5 47.9 3.03 14.19 15.9
MIR MIRANT CORP 10.72 300 2 -33.75 -1.43 -7.87 5.1
PEIX PACIFIC ETHANOL INC 1.1     N/A 4 103.7 2.71 12.73     N/A
PLUG PLUG POWER INC 0.45 -84.81 4 -61.54 2.19 6.11     N/A
RSOL REAL GOODS SOLR 3.16 -11.05 3 9.72 1.66 2.28 45.14
RTK RENTECH INC 1.08 -35.48 3 -35.71 1.81 3.77     N/A
SESI SES SOLAR INC 0.06     N/A 3 -56.15 1.49 1.02     N/A
SOLF SOLARFUN POWER 11.65 -22.98 4 110.24 2.48 11.22 7.41
SOLR GT SOLAR INTL 8.97 37.34 4 58.48 1.93 7.73 10.84
STP SUNTECH PWR HLD 9.72 -38.23 4 -35.93 2.27 9.68 15.45
TPCG TPC GROUP INC 27.4 5.26 4     N/A 1.85 5.57 20.72
TSL TRINA SOLAR LTD 30.73 23.01 4 79.29 2.02 8.01 11.3
WPRT WESTPORT INNOV 18.75 34.11 3 54.96 1.95 4.97     N/A

  VE Premium Website Stock Analysis subscribers can screen our universe of more than 5,700 equities for modern energy stocks, or any other sector and industry group by valuation, forecast, and ratings data HERE. 

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

Disclosure: no positions