January 30, 2012

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MARKET OVERVIEW

Index
DJIA NASDAQ RUSSELL 2000 S&P 500

started week
12423.12 2736.34 769.05 1290.22

Thursday Close
12624 2788.33 782.37 1314.5

3 day change
200.88 51.99 13.32 24.28

3 day change %
1.62% 1.90% 1.73% 1.88%

ytd
3.33% 7.03% 5.59% 4.52%

Summary of VE Stock Universe

Stocks Undervalued Stocks Overvalued Stocks Undervalued by 20% Stocks Overvalued by 20% 68.36% 31.64% 31.86% 8.69%

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
1.28% 0.23% 0.23% 0.37% 0.86% 1.47% 0.68% 0.20% 0.64% 0.76% 0.80% 0.58% -0.28% 0.89% 0.99% -0.38%

MTD
2.38% 8.42% 5.51% 3.97% 6.67% 10.51% 3.54% 3.76% 3.55% 7.00% 4.08% 5.28% 3.15% 3.64% 5.40% -0.88%

YTD
2.38% 8.42% 5.51% 3.97% 6.67% 10.51% 3.54% 3.76% 3.55% 7.00% 4.08% 5.28% 3.15% 3.64% 5.40% -0.88%

Valuation
9.53% undervalued 12.93% undervalued 11.32% undervalued 10.41% undervalued 10.47% undervalued 9.32% undervalued 11.84% undervalued 8.66% undervalued 9.18% undervalued 8.29% undervalued 15.88% undervalued 7.26% undervalued 12.38% undervalued 2.16% undervalued 6.74% undervalued 5.06% undervalued

Last 12MReturn
-12.76% 28.53% -21.80% 4.36% -4.75% -15.04% -4.19% -1.25% -5.32% -5.67% 13.69% 4.27% -15.15% 5.27% -15.16% -0.43%

P/E Ratio
16.47 14.8 22.9 29.98 44.57 40.26 28.39 18.24 20.48 24.51 35.22 14.82 38.43 23.61 20.73 28.47

Sector TalkConstruction
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 Construction Sector Stocks--Short-Term Forecast Returns

Ticker
ORN LPX TXI MHO USG

Name
ORION MARINE GP LOUISIANA PAC TEXAS INDS M/I HOMES INC USG CORP

Mkt Price
6.48 9.48 32.39 11.45 14.24

Valuation(%)
175.15 -14.19 -10.12 -37.35 -9.74

Last 12-M Retn(%)

-45.86 -2.17 -17.12 -24.37 -11.5

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

Ticker
USG LPX TXI MHO MDC

Name
USG CORP LOUISIANA PAC TEXAS INDS M/I HOMES INC MDC HLDGS

Mkt Price
14.24 9.48 32.39 11.45 21.27

Valuation(%)
-9.74 -14.19 -10.12 -37.35 -42.95

Last 12-M Retn(%)

-11.5 -2.17 -17.12 -24.37 -28.02

Top-Five Construction Stocks--Composite Score

Ticker
JEC RYN CBI URS WY

Name
JACOBS ENGIN GR RAYONIER INC CHICAGO BRIDGE URS CORP WEYERHAEUSER CO

Mkt Price
45.16 47.5 43.67 40.38 21.01

Valuation(%)
-25.11 -2.87 -6.27 -14.29 -18.4

Last 12-M Retn(%)

-9.84 30.85 26.87 -3.81 1.64

Top-Five Construction Stocks--Most Overvalued

Ticker
ORN NCS URI AYI EXP

Name
ORION MARINE GP NCI BLDG SYSTEM UTD RENTALS INC ACUITY BRANDS EAGLE MATERIALS

Mkt Price
6.48 11.47 34.69 57.75 30.18

Valuation(%)
175.15 99.56 41.93 27.06 26.89

Last 12-M Retn(%)

-45.86 -6.44 36.31 5.23 8.8

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What's Hot-The ValuEngine Forecast 16 MNS Newsletter

The ValuEngine Forecast 16 MNS Portfolio Newsletter is derived from the ValuEngine Diversified Growth Benchmark Portfolio Strategy. This strategy is the product of ValuEngine's academic research team and combines cutting-edge financial analysis and portfolio construction techniques with real-world Wall St. know how. Since inception, the ValuEngine Forecast 16 MNS Portfolio Newsletter has provided a return of 44% while achieving a better Sharpe and Sortino ratios than the S&P 500. In addition, the ValuEngine Forecast Model MNS Portfolio Newsletter beats the S&P 500's overall volatility and had a maximum draw down that was @66% less!

Our Forecast 16 Market Neutral Portfolio Newsletter subscribers were alerted to many winning trades over the past few months. Recent changes to the newsletter make this portfolio easier to trade, and we want to remind our clients of the benefits of the market neutral approach and to publicize our recent strong performance. We just re-balanced the portfolio for the month and the long-side results were impressive. Here are the results for the primary and alternate long-side picks: Entry Price 12/16/2011
41.79 29.49 20.99 10.55 17.18 25.30

Position Ticker
Long 1 Long 1 Long 1 Long 1 Long 1 Long 1 MOG.A HMC VALE CAR YOKU OC

Company Name
MOOG INC A HONDA MOTOR VALE RIO DO-ADR AVIS BUDGET GRP YOUKU.COM- ADR OWENS CORNING

Closing Price
42.73 33.20 23.83 12.67 18.98 31.96

Change
0.94 3.71 2.84 2.12 1.80 6.66

%Change
2.25 12.58 13.53 20.09 10.48 26.32

Sector
AEROSPACE AUTO TIRES TRUCKS BASIC MATERIALS BUSINESS SERVICES COMPUTERS TECHNOLOGY CONSTRUCTION

Position Ticker
Long 1 Long 1 Long 1 Long 1 Long 1 Long 1 Long 1 Long 1 Long 1 Long 1 Long 2 Long 2 Long 2 Long 2 Long 2 Long 2 Long 2 Long 2 Long 2 Long 2 Long 2 Long 2 Long 2 Long 2 Long 2 Long 2 LMCA JOBS FAF MTW AMLN LUK ATLS HNNMY TK NRG ATK TM CF AH CIEN CBI ESI EL ACTG SLT DNDN MIC EROC VRA RYAAY TEF

Company Name
LIBERTY MDA-LC 51JOBS INC-ADR FIRST AMER FINL MANITOWOC INC AMYLIN PHARMA LEUCADIA NATL ATLAS ENERGY LP HENNES&MAURIT TEEKAY CORP NRG ENERGY INC ALLIANT TECHSYS TOYOTA MOTOR CP CF INDUS HLDGS ACCRETIVE HLTH CIENA CORP CHICAGO BRIDGE ITT EDUCATIONAL ESTEE LAUDER ACACIA RES-TECH STERLITE INDUST DENDREON CORP MACQUARIE INFRA EAGLE ROCK EGY VERA BRADLEY RYANAIR HLDGS TELEFONICA S.A.

Entry Price 12/16/2011

73.45 42.94 12.29 8.67 10.14 22.09 23.92 5.97 25.65 18.21 55.02 65.37 130.16 21.37 10.66 36.54 51.39 106.35 30.24 7.08 7.44 26.32 10.81 33.17 29.77 16.86

Closing Price
84.32 42.22 13.23 11.36 11.57 25.10 26.75 6.36 25.83 17.24 60.76 67.64 172.68 26.39 14.55 40.78 65.39 115.08 40.03 8.59 13.70 28.76 11.27 34.00 29.37 17.21

Change
10.87 -0.72 0.94 2.69 1.43 3.01 2.83 0.39 0.18 -0.97 5.74 2.27 42.52 5.02 3.89 4.24 14.00 8.73 9.79 1.51 6.26 2.44 0.46 0.83 -0.40 0.35

%Change
14.80 -1.68 7.65 31.03 14.10 13.63 11.83 6.53 0.70 -5.33 10.43 3.47 32.67 23.49 36.49 11.60 27.24 8.21 32.37 21.33 84.14 9.27 4.26 2.50 -1.34 2.08

Sector
CONSUMER DISCRETIONARY CONSUMER STAPLES FINANCE INDUSTRIAL PRODUCTS MEDICAL MULTI-SECTOR CONGLOMERATES OILS ENERGY RETAIL WHOLESALE TRANSPORTATION UTILITIES AEROSPACE AUTO TIRES TRUCKS BASIC MATERIALS BUSINESS SERVICES COMPUTERS TECHNOLOGY CONSTRUCTION CONSUMER DISCRETIONARY CONSUMER STAPLES FINANCE INDUSTRIAL PRODUCTS MEDICAL MULTI-SECTOR CONGLOMERATES OILS ENERGY RETAIL WHOLESALE TRANSPORTATION UTILITIES

Our Diversified Growth Strategy Picked these Winners Last Month! Manitowac (MTW) Up 31% Dendreon Corp (DNDN) Up 84% Ciena Corp (CIEN) Up 36% Acacia Research (ACTG) Up 32% ITT Corp (ITT) Up 27% Looking for an investment plan that can beat the returns of the S&P 500 with smaller draw downs and less overall risk? Then subscribe to The ValuEngine Forecast 16 MNS Portfolio Newsletter. The ValuEngine Forecast 16 MNS Portfolio is based on our highly-refined and tested ValuEngine Diversified Growth Strategy.

Click HERE to Download a FREE Sample of Our Best Performing Newsletter If you have any questions please don't hesitate to contact us support@valuengine.com (800) 381-5576 If you would prefer to put the power of ValuEngine to work for you at our new full-service money management firm, please contact us
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--(1.982) My annual value level is 2.502 with semiannual, daily and weekly pivots at 1.903, 1.893 and 1.880, and quarterly, monthly and semiannual risky levels at 1.687, 1.409 and 1.385. Commodities and Forex Comex Gold--($1655.5) Annual and weekly value levels are $1575.8, $1388.4 and $1569.2 with daily, semiannual pivots at $1671.1, $1635.8 and $1659.5, and monthly and quarterly risky levels at $1706.7 and $1740.9. Nymex Crude-- (($100.40) Semiannual and monthly value levels are $79.83 and $75.53 with daily, monthly, and weekly pivots at $99.42, $99.87 and $100.40, and semiannual and annual risky levels at $104.84, and $103.58 and $117.00. The Euro--(1.2960) Weekly, quarterly and weekly value levels are 1.2506, 1.2499 and 1.2467 with monthly, daily and semiannual pivots at 1.2780, 1.2895 and 1.2980, and annual and semiannual risky levels at 1.4239 and 1.4405. Major Indices ValuEngines Forecasting Model shows limited selections when I screen for stocks likely to rise 7.5% or more over the next twelve months. There are no candidates for the following indices / sectors; None of the 30 Dow Stocks, no regional banks, no pharmaceuticals, no high-tech names, no oil services stocks, no retailers, no semiconductors, and no utilities. Only four Transportation stocks qualify. Only five NASDAQ 100 Stocks qualify. And only 22 of the S&P 500 qualify. Equity Technicals The daily charts for the major averages are overbought. The Dow closed above its quarterly pivot at 12,478 on Tuesday. The S&P 500, NASDAQ 100 (NDX) and the SOX followed on Wednesday with closes above quarterly pivots at 1305.4 SPX, 2422 NDX, and 390.17 SOX. The NASDAQ followed on Thursday closing above my quarterly pivot at 2777. If the Dow Transports close above my quarterly risky level at 5448 with the Russell 2000 above its quarterly pivot at 829.03 the odds of seeing higher highs in 2012 then 2011 increases. The May 2011 high for the Dow Industrials was 12,876.

Equity Fundamentals: The percentage of undervalued stocks fell below 70.0% at 68.4% for the first time since July. All sixteen ValuEngine sectors remain undervalued, but only six by double-digit percentages (10.4% to 15.9%). The major input other than higher stock prices is that the yield on the 30-Year Bond has moved above 3.00%. Fundamentally, stocks are not cheap enough to chase them based on their technical momentum. BE CAREFUL ON THE LONG SIDE! Key Levels for the Major Equity Averages Dow --(12,634) Monthly and semiannual value levels are 11,210, 8,425 and 8,336 with annual, weekly and quarterly pivots at 12,312, 12,430 and 12,478, and daily, quarterly and annual risky levels at 12,642, 12,796 and 14,032. S&P 500--(1314.5) Monthly and semiannual value levels are 1152.8, 841.7 and 829.9 with weekly, daily and quarterly pivots at 1285.8, 1317.9 and 1305.4, and annual risky levels at 1363.2 and 1562.9. NASDAQ (2788) Weekly, monthly and semiannual value levels are 2670, 2432, 2012 and 1952 with annual, quarterly and daily pivots at 2698, 2777 and 2767, and quarterly and annual risky levels 2849 and 3232. NASDAQ 100 (NDX) (2442) Weekly, annual, monthly and semiannual value levels are 2341, 2300, 2185, 1851 and 1743 with daily and quarterly pivots at 2432 and 2422 and quarterly and annual risky levels at 2603. Dow Transports (5302) Monthly and semiannual value levels are 4443, 4407 and 3778 with my weekly pivot at 5123, and daily, quarterly and annual risky levels at 5341, 5448, 5861 and 6111. Russell 2000 (782.37) Monthly and semiannual value levels are 646.71, 572.90 and 510.81 with a weekly pivot at 755.22, and daily, quarterly and annual risky levels at 790.24, 829.03, 836.15 and 969.09. The SOX (412.11) Weekly, monthly, annual and semiannual value levels are 367.06, 310.48, 269.80, 277.90 and 194.47 with quarterly and daily pivots at 390.17 and 412.78, and annual risky level at 520.61.

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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