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February 23, 2010

ValuEngine Models Remain Down on Home Building Industry

The latest Case Shiller Index data indicates that home prices may be stabilizing in the
U.S. as the rate of yearly decreases continues to slow. According to the latest data, home
prices only dropped by 2.5% year-over-year for December. This compares favorably to the
prior 2009 declines that ranged from 8.7% - 19%. However, it is important to note that what
we have here is a stabilization in the rate of decrease, not an increase in home prices.
It remains to be seen whether home prices will continue their stabilization once a variety of
market supports are removed--supports which include low-interest rates, tax credits, etc.

ValuEngine rates the Home Building Industry poorly overall with only one component
predicted to outperform the market. Most rated Home Builders exhibit poor valuation figures
as well as negative future forecast returns. For ValuEngine, the only worthwhile target in the
Industry is DR Horton (DHI). DHI exhibits a favorable valuation figure as well as the best short
and long-term forecast return figures in the entire Home Building Industry.

Subscribers can check out the latest figures on DHI HERE.

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MARKET OVERVIEW
Summary of VE Stock Universe
Stocks Undervalued 52.30%
Stocks Overvalued 47.70%
Stocks Undervalued by 20% 25.68%
Stocks Overvalued by 20% 22.19%

SECTOR OVERVIEW

Last 12- P/E

Sector Change MTD YTD Valuation
MReturn Ratio
Basic Industries -0.01% 4.17% -1.14% 10.11% overvalued 93.13% 26.75
Capital Goods 0.09% 2.40% 0.69% 5.40% overvalued 66.29% 22.82
Consumer Durables -0.12% 2.15% 0.24% 11.13% overvalued 93.33% 22.21
Consumer Non-Durables 0.31% 2.53% 0.45% 2.11% overvalued 87.01% 19.1
Consumer Services 0.27% 3.31% 1.46% 0.03% undervalued 84.55% 22.13
Energy 0.13% 1.15% -2.60% 12.92% overvalued 85.73% 21.89
Finance 0.86% 1.65% 2.29% 0.41% undervalued 51.02% 18.57
Health Care 0.16% 2.81% 0.10% 5.84% undervalued 63.53% 20.57
Public Utilities -0.07% 1.07% -3.62% 0.76% overvalued 49.46% 16.18
Technology 0.40% 4.15% 2.05% 3.39% undervalued 85.53% 27.73
Transportation 1.08% 3.34% -0.52% 1.35% overvalued 65.72% 20.9