February 4, 2013

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! NO OBLIGATION, 30 Day FREE TRIAL!

VALUATION WARNING: Our models find that overvaluation is at levels typically seen when market pullbacks occur. Overvalued stocks now make up 65% of our universe and 27% of the universe is calculated to be overvalued by 20% or more. ALL sectors are calculated to be overvalued.

Valuation WARNING is ON
ValuEngine Issues Market Valuation Warning ValuEngine has issued a market valuation warning as of today, February 4th. Our overall market overvaluation and overvalued by 20% or more figures have reached levels which have been correlated with market pull backs in the past. This is a time for investors to keep a close eye on the market and to consider booking some profits and perhaps hedging against a move to the downside. The ValuEngine Valuation Model tracks more than 8000 US equities, ADRs, and foreign stock which trade on US exchanges. The model calculates a level of mispricing or valuation percentage for each equity based on what the stock should be worth if the market were totally rational and efficient--an academic exercise to be sure, but one which allows for useful comparisons between equities, sectors, and industries. We track market valuation figures and use them as a metric for making calls about the overall state of the market. Whenever we see levels in overvaluation levels in excess of @ 65% for the overall universe and/or 27% for the overvalued by 20% or more categories, we issue a valuation warning. As of Friday's close, we now calculate that 65.16% of stocks are overvalued and 27.42% of stocks are overvalued by 20% or more.

Subscribers Get FULL ACCESS to our Market and Sector Overviews The chart below tracks the valuation metrics from June 2012 until today.

This chart shows overall universe valuation in excess of 60% vs the S&P 500 from the end of March 2010 to the present. Here you can see the market metrics from our last series of Valuation Watches and Warnings.

In addition to the overall valuation metrics, we see that on a sector basis ALL sectors are calculated to be overvalued. Ten of them are calculated to be overvalued by 10% or more with four of them calculated to be more than 20% overvalued. In the past, our Chief Market Strategist Richard Suttmeier has used the sector valuation figures to buttress his macro market calls. This is another indicator that stocks are no longer the bargain they were a few months ago and that investors should consider implementing additional risk management tools and/or booking some profits.

Market Overview
Summary of VE Stock Universe
Stocks Undervalued Stocks Overvalued Stocks Undervalued by 20% Stocks Overvalued by 20% 34.84% 65.16% 14.37% 27.42%

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
0.77% 1.01% 0.42% 0.74% 1.20% 0.45% 0.38% 0.59% 0.76% 0.29% 0.68% 0.60% 0.71% 1.18% 0.51% 1.23%

MTD
0.82% 1.06% 0.52% 0.81% 1.31% 0.49% 0.48% 0.73% 0.81% 0.60% 0.81% 0.64% 0.80% 1.91% 0.54% 1.48%

YTD
5.59% 7.19% 4.30% 7.21% 8.04% 9.14% 8.13% 5.57% 7.51% 6.57% 7.34% 4.27% 8.50% 9.86% 11.14% 7.51%

Valuation
7.12% overvalued 8.64% overvalued 7.82% overvalued 11.95% overvalued 16.99% overvalued 24.44% overvalued 10.30% overvalued 28.84% overvalued 18.15% overvalued 22.56% overvalued 17.61% overvalued 9.43% overvalued 8.14% overvalued 16.97% overvalued 25.29% overvalued 8.62% overvalued

Last 12MReturn
6.55% 4.69% -23.15% 9.43% 3.08% 27.91% 10.52% 12.16% 16.29% 5.63% 9.25% 13.08% -9.78% 17.38% 5.83% 9.29%

P/E Ratio
14.56 15.5 31.7 31.12 40.06 43.5 27.95 23.95 22.84 24.93 32.1 14.93 41.3 37.11 25.9 18.02