October 15, 2010

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This week's free download is our report on INTEL CORP (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 (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%.
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MARKET OVERVIEW
Index started week Thursday Close 4 day change 4 day change % ytd
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%

Summary of VE Stock Universe

Stocks Undervalued 55.12%
Stocks Overvalued 44.88%
Stocks Undervalued by 20% 25.45%
Stocks Overvalued by 20% 15.95%

SECTOR OVERVIEW
Sector Change MTD YTD Valuation Last 12- P/E Ratio
MReturn
Basic Industries -0.57% 2.58% 24.26% 7.80% overvalued 34.75% 25.16
Capital Goods -0.11% 4.08% 20.59% 2.72% undervalued 13.36% 21.61
Consumer Durables -0.59% 3.67% 16.59% 6.37% undervalued 21.94% 19.78
Consumer Non-Durables 0.03% 3.45% 10.73% 0.29% overvalued 18.79% 17.11
Consumer Services -0.40% 3.45% 14.26% 3.71% undervalued 12.06% 21.68
Energy -0.25% 6.56% 11.73% 8.81% overvalued 25.35% 25.14
Finance -0.23% 3.19% 15.18% 4.45% undervalued 4.94% 18.17
Health Care -0.30% 3.14% 22.98% 8.77% undervalued 4.28% 20.5
Public Utilities -0.11% 2.89% 2.45% 3.27% overvalued 13.18% 20.1
Technology 0.03% 4.41% 21.46% 4.03% undervalued 20.45% 24.64
Transportation -0.41% 3.56% 13.64% 0.09% overvalued 15.73% 19.12
Industry Talk--Modern Energy Featuring CEO Michele
Ashby, 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.
Last 12- Forecast Forecast
Mkt Valuation VE P/E
Ticker Name M 1-Month 1-Yr
Price (%) Rating Ratio
Retn(%) Retn(%) Retn(%)
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
CHINA SOLAR & CLEAN
CSOL 0.34 N/A 4 -31 1.14 12.16 0.96
ENERGY SOLUT
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.
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What's Hot
--The ValuEngine Forecast 22 MNS Newsletter Portfolio
Our portfolio continues to provide good results. Since inception, our market
neutral portfolio is up 39.77%. The trailing 12-Month gain is 18.78% while the S&P 500 is
up 6.40% for the same time frame. Our stop-lossed portfolio beat our regular strategy
handily with a gain of 5.62% as almost all of our shorts stopped out.

When markets are running in one direction—as they did this month, the stops
help more than they hurt—and vice-versa during times of topsy-turvy markets. Our
model picked some great longs this month and we had nine double-digit gainers. We
doubled the S&P's gains. Laggards were hardly found with only four longs posting
losses in excess of 1%. Leading the way were Freeport McMoRan, Internet Capital,
Crocs, and A-Power with gains in excess of 20%.
 Below, we provide our long-side results.
Ticker Company Name Entry Price Current Change %Change Sector Sector
9-17-10 Price Average
BASIC
CVVT CHINA VALVE TEC 8.21 7.99 -0.22 -2.68
INDUSTRIES
BASIC
FCX FREEPT MC COP-B 81.47 98.99 17.52 21.50 9.41
INDUSTRIES
PANL UNIVL DISPLAY 22.62 26.18 3.56 15.74 CAPITAL GOODS
NANO NANOMETRICS INC 12.88 13.92 1.04 8.07 CAPITAL GOODS 11.91
CONSUMER
MDC MDC HLDGS 28.22 26.96 -1.26 -4.46
DURABLES
CONSUMER
GT GOODYEAR TIRE 10.79 11.72 0.93 8.62 2.08
DURABLES
CONSUMER
CROX CROCS INC 11.03 13.84 2.81 25.48
NON_DURABLES
CONSUMER
COT COTT CORP QUE 7.59 7.55 -0.04 -0.53 12.47
NON_DURABLES
CONSUMER
ICGE INTERNET CAP GP 9.86 12.05 2.19 22.21
SERVICES
CONSUMER
PNK PINNACLE ENTRTN 11.51 11.59 0.08 0.70 11.45
SERVICES
PVX PROVIDENT ENRGY 6.80 7.72 0.92 13.53 ENERGY
WPRT WESTPORT INNOV 16.71 18.43 1.72 10.29 ENERGY 11.91
RDN RADIAN GRP INC 7.47 8.91 1.44 19.28 FINANCE
RF REGIONS FINL CP 6.95 7.17 0.22 3.17 FINANCE 11.22
SVNT SAVIENT PHARM 20.27 22.30 2.03 10.01 HEALTH CARE
MNTA MOMENTA PHARMA 14.96 14.30 -0.66 -4.41 HEALTH CARE 2.8
APWR A-POWER ENERGY 6.22 8.03 1.81 29.10 PUBLIC UTILITIES
UUGRY UNITED UTILITIES GROUP PLC 18.05 18.62 0.57 3.16 PUBLIC UTILITIES 16.13
STEC STEC INC 12.70 14.68 1.98 15.59 TECHNOLOGY
ERTS ELECTR ARTS INC 16.38 16.52 0.14 0.85 TECHNOLOGY 8.22
AMR AMR CORP 6.58 6.27 -0.31 -4.71 TRANSPORT
OSG OVERSEAS SHIPHO 33.67 33.54 -0.13 -0.39 TRANSPORT -2.55

LONG PORTFOLIO 8.64

GSPC S&P500 1124.66 1173.81 49.15 4.37

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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-- (2.491) Annual and annual value levels are 2.813 and
2.999 with monthly and weekly pivots at 2.555 and 2.509, and
daily, quarterly and semiannual risky levels at 2.357, 2.265 and
2.249. The yield on the 10-Year note rose to a test of my weekly
pivot at 2.509 on Thursday solidifying that the effect of QE2 should
be limited to my quarterly and semiannual risky levels at 2.265 and 2.249.
Commodities and Forex

Comex Gold--($1380.6) Quarterly, semiannual and annual value levels are $1306.4,
$1260.8, $1218.7 and $1115.2 with monthly and weekly pivots at $1343.7 and $1350.2
and daily risky level at $1397.6.Gold has gone Parabolic with a new all time high of
$1388.1 with today’s risky level at $1397.6.

Nymex Crude--($82.78) Weekly and annual value levels are $79.62 and $77.05 with
daily and semiannual pivots at $83.45 and $83.94, and monthly risky level at
$84.74.Strength in crude oil continues to fail between my semiannual pivot at $83.94
and my monthly risky level at $84.74.

The Euro--(1.4078) Weekly, quarterly and weekly value levels are 1.3737, 1.3318 and
1.2919 with a daily pivot at 1.4207. My monthly value level is 1.2342 with semiannual
risky level at 1.4733.The euro traded above 1.41 on Thursday with today’s risky level at
1.4207.
Major Indices
The Dow--(11,095) Semiannual, annual and quarterly value levels are 10,558, 10,379
and 8,523 with monthly and weekly pivots at 10,857 and 10,938, and annual, daily
and semiannual risky levels at 11,235, 11,290 and 11,296. My annual risky level at
11,235 was tested at the April 26th high of 11,258.01.The Dow remains below my
annual risky level at 11,235 with my semiannual risky level at 11,296. It’s still “Dow 8500
Before Dow 11,500” unless there’s a Dow Theory Buy Signal with Transports closing
above its May 3rd closing high at 4,806.1, and the Industrials closing above its April
26th closing high at 11,205.03.
Housing

According to RealtyTrac, foreclosure filings-- including default notices,

scheduled auctions and bank repossessions totaled
930,437 properties in the third quarter, up 4% from the second quarter. Foreclosure
filings in September totaled 347,420 --up 3% from August. A record 102,134 bank
repossessions occurred in September. This increase was caused by the cessation of
the government mortgage modification program--which limited foreclosures over the
past twenty months.

A total of 288,345 properties were lost to foreclosure in the July-September

quarter, according to RealtyTrac. This is up from nearly 270,000 in the second quarter--
the previous high point in the firm's records dating back to 2005.

Banks seized more than 816,000 homes through the first nine months of 2010
and had been on pace to seize 1.2 million by the end of this year. Foreclosures may
not make these marks as as several major lenders have suspended foreclosures and
sales of repossessed homes until the foreclosure-documents mess is sorted out. Nearly
600,000 bank-owned homes are not yet on the market.

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