August 20, 2010

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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 WESTERN REFINING (WNR) is an
independent refining and marketing company headquartered in El Paso, Texas.
Western operates refineries in El Paso, Gallup, New Mexico and Yorktown, Virginia.
Western's asset portfolio also includes refined products terminals in Albuquerque and
Bloomfield, New Mexico and Flagstaff, Arizona, asphalt terminals in Phoenix and
Tucson, Arizona, Albuquerque, and El Paso, retail service stations and convenience
stores in Arizona, Colorado, and New Mexico, a fleet of crude oil and finished
product truck transports, and wholesale petroleum products operations in Arizona,
California, Colorado, Nevada, New Mexico, Texas, and Utah.
In a recent screen for short candidates, it was tough to find a ticker with worse
ratings in critical areas-- like P/E Ratio, Valuation, Momentum, and Long-Term
Forecast Price-- than WESTERN REFINING . While the stock reported a swing to
profitability earlier this month, earnings were less than analysts had predicted. Oil
stocks have been correlated strongly to the markets of late--which is different from
the usual trend of poor markets/strong oil and vice versa. Weak economic conditions
in the firm's area of operations will definitely effect the bottom line.
 ValuEngine has issued a STRONG SELL recommendation for WESTERN REFINING.
Based on the information we have gathered and our resulting research, we feel that
WESTERN REFINING has the probability to UNDERPERFORM average market
performance for the next year. The company exhibits UNATTRACTIVE market
valuation, 5-year annualized return and momentum. The company will report results
for the Quarter ending September 30th on November 4th.

The VE Detailed Valuation Report features advanced academic research that

brings you superior investment strategies in an actionable format. The most
comprehensive and useful report available.

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

MARKET OVERVIEW

Index started week Thursday Close 4 day change 4 day change % ytd
DJIA 10303.07 10271.2 -31.87 -0.31% -1.53%
NASDAQ 2161.31 2178.95 17.64 0.82% -5.03%
RUSSELL 2000 615.47 610.96 -4.51 -0.73% -2.73%
S&P 500 1077.49 1075.63 -1.86 -0.17% -3.67%

Summary of VE Stock Universe

Stocks Undervalued 76.40%
Stocks Overvalued 23.60%
Stocks Undervalued by 20% 42.78%
Stocks Overvalued by 20% 7.50%
SECTOR OVERVIEW
Sector Change MTD YTD Valuation Last 12- P/E Ratio
MReturn
Basic Industries -2.46% -3.12% 17.14% 5.20% undervalued 39.64% 23.74
Capital Goods -2.74% -7.17% 6.98% 10.82% undervalued 16.86% 20.1
Consumer Durables -1.97% -6.16% 4.60% 14.92% undervalued 31.36% 17.24
Consumer Non-Durables -1.79% -4.18% 0.39% 8.38% undervalued 23.85% 16.58
Consumer Services -1.76% -5.61% 0.16% 14.79% undervalued 16.92% 20.45
Energy -2.15% -4.25% -5.38% 3.60% undervalued 35.65% 26.03
Finance -1.61% -5.38% 6.24% 11.17% undervalued 7.24% 17.51
Health Care -2.00% -3.34% 11.20% 18.28% undervalued 9.30% 19.85
Public Utilities -1.58% -3.63% -4.64% 7.49% undervalued 15.72% 18.18
Technology -1.88% -4.54% 2.85% 17.32% undervalued 23.50% 24.08
Transportation -2.78% -6.71% 1.98% 6.84% undervalued 20.90% 17.44

Sector Talk—Transportation
As the market took a dive this week, a troubling data point for the longer term
economic outlook was the big dive in the Dow Transports yesterday. Whereas good
news from shippers such as Fed Ex and UPS a few weeks ago was comforting for
proponents of Dow Theory--which holds that transports are a leading economic
indicator-- and a net positive for the bulls, yesterday's downturn provides the opposite
sort of impression about the recovery Below, we present various top-five lists for the
Transportation Sector from our Institutional software package (VEI). We filtered the
results for liquidity by only including results that had an average daily volume in
excess of 100k shares/day and a market price greater than $2/share.

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

Last 12-M
Ticker Name Mkt Price Valuation(%)
Retn(%)
UAUA UAL CORP 20.58 38.24 266.84
LCC US AIRWAYS GRP 9.19 26.62 217.99
OSG OVERSEAS SHIPHO 34.3 65.19 0.23
HRZ HORIZON LINES-A 3.84 8.87 -19.67
SAIA SAIA INC 12.16 20.04 -33.73
Top-Five Transportation Stocks--Long-Term Forecast Returns
Last 12-M
Ticker Name Mkt Price Valuation(%)
Retn(%)
KSP K-SEA TRANSPORT 5.11 4.05 -72.2
EXPD EXPEDITORS INTL 41.54 48.71 32.12
UPS UTD PARCEL SRVC 65.42 78.32 28.86
JBHT HUNT (JB) TRANS 33.66 42.17 16.83
HTZ HERTZ GLBL HLDG 9.21 12.71 -8.63

Top-Five Transportation Stocks--Composite Score

Last 12-M
Ticker Name Mkt Price Valuation(%)
Retn(%)
CSX CSX CORP 50.29 68.28 18.8
NSC NORFOLK SOUTHRN 54.56 68.16 22.61
UAUA UAL CORP 20.58 38.24 266.84
KSU KANSAS CITY SOU 33.78 43.95 48.68
UPS UTD PARCEL SRVC 65.42 78.32 28.86

Top-Five Transportation Stocks--Most Overvalued

Last 12-M
Ticker Name Mkt Price Valuation(%)
Retn(%)
LFL LAN CHILE-ADR 27.03 18.76 128.1
NMM NAVIOS MARITIME 17.4 12.24 70.25
AER AERCAP HLDGS NV 11.52 8.13 35.85
EXM EXCEL MARITIME 5.54 4.01 -17.93
ERJ EMBRAER AIR-ADR 26.24 19.86 22.62

VE Premium Website Stock Analysis subscribers can find complete valuation,

forecast, and ratings data on every individual equity in the Transportation Sector
HERE.
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--What's HOT
The ValuEngine Forecast 22 Market Neutral
Strategy Newsletter

Our Forecast 22 Market Neutral Strategy Newsletter portfolio posted a 5.58%

gain versus the S&P 500's decline of 1.44%. Since inception, our market neutral
portfolio is up 35.72%. The trailing 12-Month gain is 12.05% while the S&P 500 is up
3.49% for the same time frame.

Our more conservative stop-lossed portfolio posted a gain of 2.44% as we saw

many of our shorts stopped out early in the re-balance period only to see the markets
dive and the shorts come roaring back. Still--in almost all flavors, the portfolio was in
the green for the entire month.

Leading sectors for our shorts were Health Care, Energy, and Consumer
Services. Technology was the laggard thanks to a strong gain by Power-One (PWER.)
Losses for our longs were concentrated in the Capital Goods and Consumer Services
sectors with gains concentrated in the Basic Industries picks. Our big winner this
month was our short in Vivus Pharma. The FDA refused to approve one of their major
drugs and we scored a whopping 55% gain.
 The monthly chart below perfectly illustrates the performance of our portfolio as
well as the benefit of the market neutral approach. Despite some wild gyrations by
the benchmark index (blue line)--down, up, and them down again--the overall
performance (green line) was always positive and on a mostly upward trend. Of
course, every month isn't as positive as the last re-balance period, but when the
portfolio handily beats the benchmark by 500-700 bps a few times a year, the long-
term effects are very beneficial to the bottom line.

For a market neutral strategy with significant volatility-reducing benefits, our

newsletter continues to perform remarkably well. In fact, this product has been so
successful it was recently selected by Forbes.com for inclusion into its stable of
newsletter products. Forbes.com believes that the VE Forecast 22 MNS Portfolio offers
a sophisticated newsletter for investors seeking access to hedge fund-type strategies
without hefty performance fees and onerous qualified investor requirements.
Since inception, we are up more than 35%, our average monthly return is
@1.5%, our Sortino Ratio--"good" volatility--beats the S&P 500 by @50%,
our max drawdown is 1/3 the S&P's, and our annual volatility is @30% less
than the S&P 500!
 For more on the VE Forecast 22 Market Neutral Strategy Newsletter
Portfolio, Click the Logo Below

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--(2.580) My annual pivot is 2.813 with a weekly pivot

at 2.598 and daily risky level at 2.494. My annual value level is
2.999 with quarterly and semiannual risky levels at 2.495 and
2.249. Note that the decline in yield is extremely overdone.

Commodities and Forex

Comex Gold--($1232.9) Weekly, quarterly, monthly and annual value levels are
$1159.3, $1140.9, $1133.2 and $1115.2 with semiannual and daily pivots at $1218.7 and
$1228.4, and semiannual risky level at $1260.8. Note that gold is overbought on its
daily chart.

Nymex Crude--(($74.36) My daily value level is $70.55 with weekly and annual pivots
at $76.86 and $77.05. My monthly and semiannual risky levels are $80.02 and $83.94.
My quarterly value level is $56.63.
The Euro--(1.2815) Daily, quarterly and monthly value levels are 1.2499, 1.2167, 1.1486
and 1.1424 with weekly and semiannual risky levels at 1.3223 and 1.4733.

Major Indices

The Dow--Daily: (10,271) Daily and weekly value levels are 10,037 and 10,055 with my
annual pivot at 10,379, my monthly pivot at 10,439, and semiannual and annual risky
levels at 10,558 and 11,235. My quarterly value level is 7,812. My annual risky level at
11,235 was tested at the April 26th high of 11,258.01. Note that the Dow is below 21-
day, 50-day and 200-day simple moving averages at 10,490, 10,302 and 10,451.

Housing and Banking Indices

Housing Sector Index (HGX)--HGX is down 10.2% year to date after a decline of 34.3%
from its April 26th high to its July low, and is down 68.6% from its July 2005 high. The
weekly chart is neutral with rising technical momentum and weekly close below the
Five-week modified moving average at $95.93. My quarterly value level is $85.43 with
monthly risky level at $111.52.

America’s Community Bankers’ Index (ABAQ)--ABAQ is down 4.7% year to date, and
from the year to date high to July low declined 20.9%. ABAQ is down 55.2% from its
December 2006 high. The index has a negative but oversold weekly chart profile,
which stays that way given weekly closes below the Five-week modified moving
average at $149.83. My quarterly value level is $138.17 with a semiannual pivot at
$147.09.

Regional Bankers Index (BKX)-- BKX is now up 5.7% year to date after a decline of
24.5% since its April 21st high to its July low, and is down 62.7% from its February 2007
highs. The weekly chart shifts to negative with a weekly close below the Five-week
modified moving average at $47.46. My semiannual and quarterly value levels are
$41.51 and $33.15 with a monthly risky level at $52.80.

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