May 14, 2010

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This week's free download is our report on BON-TON STORES INC

(BONT). ValuEngine has issued a BUY recommendation for BON-TON STORES INC.
Based on the information we have gathered and our resulting research, we feel that
BON-TON STORES INC has the probability to OUTPERFORM average market
performance for the next year. The company exhibits ATTRACTIVE expected EPS
growth, momentum and price/sales ratio.
BON-TON STORES INC, with corporate offices in York, Pennsylvania and
Milwaukee, Wisconsin, operates 278 stores, including 11 furniture galleries, in 23 states
in the Northeast, Midwest and upper Great Plains under the Bon-Ton, Bergner’s,
Boston Store, Carson Pirie Scott, Elder-Beerman, Herberger’s and Younkers
nameplates and, in the Detroit, Michigan area, under the Parisian nameplate. The
stores offer a broad assortment of brand-name fashion apparel and accessories for
women, men and children, as well as cosmetics and home furnishings. The
company's strategy focuses on being the premier fashion retailer in smaller markets
that demand--but often have limited access to, better branded merchandise. In
many of its markets, The Bon-Ton is the primary destination for branded fashion
merchandise from top designers such as Calvin Klein, Liz Claiborne, Nautica, Ralph
Lauren and Tommy Hilfiger.
 The company is undervalued by @13% according to our Fair Value model and
its short-term forecast figures are strong. The company is due to release its Q1 2010
results at 10am on May 20th.
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MARKET OVERVIEW

Thursday 4 day 4 day

Index started week ytd
Close change change %
DJIA 10386.18 10783 396.82 3.82% 3.38%
NASDAQ 2365.97 2394.36 28.39 1.20% 4.36%
RUSSELL 2000 668.25 709.85 41.6 6.23% 13.01%
S&P 500 1122.27 1157.43 35.16 3.04% 3.66%

Summary of VE Stock Universe

Stocks Undervalued 50.15%
Stocks Overvalued 49.85%
Stocks Undervalued by 20% 23.95%
Stocks Overvalued by 20% 23.07%

SECTOR OVERVIEW
Sector Change MTD YTD Valuation Last 12- P/E Ratio
MReturn
Basic Industries 2.56% -1.81% 20.75% 8.36% overvalued 59.77% 25.92
Capital Goods 2.82% -2.87% 17.39% 10.54% overvalued 48.53% 21.96
Consumer Durables 2.28% -2.97% 14.17% 11.31% overvalued 72.43% 24.22
Consumer Non-Durables 1.55% -2.26% 9.52% 0.77% overvalued 54.52% 19.39
Consumer Services 2.02% -1.94% 17.76% 4.30% overvalued 56.55% 23.04
Energy 2.21% -6.10% -0.25% 2.91% overvalued 43.00% 22.57
Finance 1.49% -2.22% 13.00% 6.22% overvalued 29.03% 19.45
Health Care 2.06% -0.67% 12.50% 1.94% undervalued 44.43% 21.71
Public Utilities 1.11% -3.06% -0.08% 3.27% overvalued 28.01% 16.85
Technology 2.16% -2.60% 11.60% 5.06% undervalued 59.32% 26.53
Transportation 2.62% -2.37% 15.19% 4.98% overvalued 48.57% 21.75
Industry Talk
--Precious Metals
Gold has been in the news this week as investors have driven the "currency of
last resort" to an all-time high price of $1,249.70/oz. today--but this still lags the 1980
inflation-adjusted price of $2,176. Recent events in the Euro zone have spurred
inflation fears yet again. US analysts point out that one reason the US has seen little
overall inflation is because the ongoing housing bubble deflation helps to keep the
overall figures artificially low.
Below, we present the key ValuEngine data for the Precious Metals Industry
from our Institutional software package (VEI). We did not include any liquidity or
share price requirements in our screen.
Top-Five Precious Metals Industry Stocks--Short-Term Forecast Returns
Last 12-M
Ticker Name Mkt Price Valuation(%)
Retn(%)
URRE URANIUM RESOURCES INC 0.52 N/A -50.75
AAUKY ANGLO AMERICAN PLC 19.86 -29.07 80.22
TIE TITANIUM METALS 17.41 95.83 129.99
OTMN OT Mining Corp 0.21 N/A -47.5
VALE VALE SA 28.59 -24.49 67.29

Top-Five Precious Metals Industry Stocks--Long-Term Forecast Returns

Last 12-M
Ticker Name Mkt Price Valuation(%)
Retn(%)
URRE URANIUM RESOURCES INC 0.52 N/A -50.75
LMCO LI-ION MOTORS CORP 1.62 N/A -55.25
AAUKY ANGLO AMERICAN PLC 19.86 -29.07 80.22
NEM NEWMONT MINING CORP 57.13 19.8 34.08
TIE TITANIUM METALS 17.41 95.83 129.99

Top-Five Precious Metals Industry Stocks--Composite Score

Last 12-M
Ticker Name Mkt Price Valuation(%)
Retn(%)
AAUKY ANGLO AMERICAN PLC 19.86 -29.07 80.22
VALE VALE SA 28.59 -24.49 67.29
FNXMF FNX MINING CO INC 12.27 -26.41 130.64
KMT KENNAMETAL INC 32.23 -24.06 76.7
HL HECLA MNG CO 6.26 -5.41 110.07
Top-Five Precious Metals Industry Stocks--Most Overvalued

Last 12-M
Ticker Name Mkt Price Valuation(%)
Retn(%)
VALE.P VALE SA 24.58 142.26 71.29
TIE TITANIUM METALS 17.41 95.83 129.99
LIHR LIHIR GOLD LIMITED 36.63 95.53 61.29
EGO ELDORADO GOLD CORP 17.5 87.09 114.99
NGD NEW GOLD INC 6.18 76.04 178.38

VE Premium Website Stock Analysis subscribers can find complete valuation,

forecast, and ratings data on every individual equity in the Precious Metals Industry
HERE
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What's Hot
--Catching Up with TK Ng

One of these Tickers is NOT like the Others!

Former ValuEngine Analyst and Quant Guru Tk Ng published the following on his new
blog Technifundamentals this week. It has been edited for presentation in our
newsletter. The complete version--along with other content of interest, can be found
HERE.
 Visual finance makes it easy to discern trends that might not be as readily
apparent from numbers in a spreadsheet. For today's post, I plotted the ValuEngine
model variables of the SP500 component stocks on a Self-Organizing Map [SOM]
using our Viscovery SOMine Software.

Check out that very small cluster in the upper left-hand corner of our SOM. Our
Viscovery software divided the S&P 500 components into seven clusters. Six of them
have a broad swatch of index components, but cluster 7 contains only one. Cluster 7
is where the software decided to put CitiGroup (C).
 What makes C so different from the rest of the S&P 500? Let's have a look at
each cluster's statistics--plotted as deviations from the Mean of the entire data set.

With these stats, we can easily understand why C stands alone by itself. C's
cluster is startlingly different from all the other clusters in our S&P500 SOM. For starters,
C's average daily volume is an unheard of 639,321,283. For comparison's sake,
consider that other high-liquidity big caps like Wal-Mart (WMT) or Procter and Gamble
(PG) average "only" 15 to 20 million shares/day. What is going on with C that it is
trading at such an unbelievable level on a daily basis?

I would argue that this may be illustrative of a high-level of algorithmic machine

trading. Big players are trading C at the speed of light and thus we see high volume
and they "vaccuum up pennies" on very small swings in the share price of C.
 What other characteristics does C have to make it machine-bait? Check out
the additional cluster stats below.

Here we see that Cluster 7--C-- is very undervalued [C's valuation is -70 %
according to ValuEngine). It also has a very high 1-month forecast return % and a
very high 1-year forecast return % with an expected EPS growth of 400%!
I believe that these characteristics make C very attractive for computerized
trading programs implementing a mean-reversion algorithm and those implementing
a momentum algorithm. This helps to explain why the volume for trades in C is so far
out of the "normal" range for the rest of the index.
I would advise that individual investors stay clear of machine-dominated
stocks. Volume may be very high, but changes in overall share price is limited as the
machines go for big volume and are able to profit from penny-size gains. Last week's
market chaos demonstrated once again that an individual investor has little chance
when the computer programs get fired up and implement their instructions.

Training Tip
--Check the Web for ValuEngine Updates, Bulletins, and Stock Picks

Checking our web content can be good for your portfolio ! Our Chief Market
Strategist Richard Suttmeier famously called the bottom of the recent Bear Market on
March 5th, 2009 and made a call for a big market rally in one of our bulletins soon
thereafter. Lately, our Forecast Model has been on fire and regular readers of our
Daily Bulletins were tipped off to the following stocks:

Avanir Pharma (AVNR)--up 25% in just 8 days

Harry Winston Diamonds (HWD)--up 19% since April 27th
Borders Group (BGP)--up 70% in 2 weeks
Palm (PALM)--sold short for a 57% gain since January
UAL Corp (UAUA)--up 202% since November
 We provide a variety of content for our clients and potential clients every
trading day. Here are just a few places you can find out the latest news from
ValuEngine's Team of Analysts.

Follow us on Twitter HERE

Our Website features Daily Bulletins most trading days that can be found
HERE

Our [Link] Page features our Daily Bulletins as well as Chief Market
Strategist Richard Suttmeier's Four-in-Four Report HERE

Suttmeier Says
--Commentary and Analysis from Chief Market
Strategist Richard Suttmeier

If you have any comments or questions, send them to Rsuttmeier@[Link]

Complacency Returns to the Stock Market, while Risk Aversion Continues

Most of the stocks I graphed so far this week are back

above their May 6 high--which is a sign of complacency as stocks
leap back on the “wall of worry”. The bulls say ignore the “Flash
Crash.” I remain bearish and advise investors to embrace that
type of volatility as it provides buying opportunities.

Treasury Yields
This was an OK auction for a $28 billion issue. The winning bid was 3.548, but you
could buy it cheaper after the auction. The bid to cover was a solid 2.96 times the
auctioned amount. The Indirect Bid was strong at 42%, which is above my 30% to 40%
neutral zone. My semiannual pivot remains support at 3.675 with my quarterly pivot as
resistance at 3.467.
Commodities and Forex

Comex Gold-- held my semiannual pivot at $1186.5, which is a key to the scenario
calling gold “the currency of last resort.” My weekly pivot is $1206.7 with a monthly
pivot at $1217.3 and monthly resistance at $1270.1.

Nymex Crude Oil-- is below its 200-week simple moving average at $76.79 and my
annual pivot at $77.05. Quarterly supports are $68.03 and $58.51 with weekly and
monthly resistances at $82.15 and $88.53. The lack of a rally in crude oil questions the
global growth story.

Major Indices

The Dow--saw a high of 10,880 at the May 6th high, with 50-day simple moving
average at 10,862. The Dow closed above this band on Wednesday.

On my weekly chart, the Dow ended last week below its 200-week simple
moving average at 11,130, after testing the 61.8% Fibonacci Retracement of the
October 2007 to March 2009 low at 11,246 with the April 26th high at 11,258. MOJO is
now rolling over and will likely end the week declining out of overbought territory. A
weekly close below the 5-week modified moving average at 10,799 shifts the weekly
chart profile to negative. My annual pivot is 11,235 with monthly and semiannual
resistances at 11,274 and 11,442. I still predict Dow 8,500 before Dow 11,500.

NASDAQ--ended Wednesday above its May 6 high at 2408 and its 50-day simple
moving average at 2417

The S&P 500--ended Wednesday above its May 6 high at 2408 and its 50-day simple
moving average at 2417
AAPL

The daily chart for Apple shows rising technical momentum with the stock
above its 21-day, 50-day and 200-day simple moving averages at $257.21, $241.59
and $203.83. My semiannual value level is $216.31 with a weekly pivot at $258.28 and
monthly risky level at $262.54. Apple traded above my monthly risky level at $262.64
giving investors an opportunity to book profits. The weekly pivot at $258.28 proved to
be a magnet, and the Thursday’s close was below Wednesday’s low of $258.70,
which qualifies as a daily “key reversal”.

The Latest FDIC Report

I posted my latest update to the FDIC Report this week. Look for a major
revision the first week of JUne. I predict continued weakness for the Banking and
Housing sectors in the report. Numbers for the ValuEngine List of Problem Banks look
like this:

• As of April 30, there were 394 banks or companies engaged in financial

activities overexposed to C&D and/or CRE loans in the ValuEngine database
with full data coverage.

• Of these overexposed institutions, 83 were rated “1-Engine” Strong

Sells/Underperform, 97 were rated “2-Engine” Sells/Underperform, 173 were
rated “3-Engine” Holds/Roughly Match, 34 were rated a “4-Engine”
Buy/Outperform, and 7 were rated “5-Engine” Strong Buy/Outperform.

• This means that there are currently 180 banks rated Sell or Strong Sell that are
also overexposed to C&D and/or CRE loans.
Media Appearances

I had a busy week in Manhattan and made a variety of media appearances. Click
the screen captures below to view discussions of the housing market, the crazy
market gyrations, how to trade this market, and the effects of the euro bailout on
world-wide markets.
--The ValuEngine FDIC Report
ValuEngine Chief Market Strategist Richard Suttmeier is an expert on the US
Banking System and uses the health of the system as a leading economic indicator.
He distills his thoughts on the banking system in our FDIC Report.

A critical portion of this report is the ValuEngine List of Problem Banks. Problem
banks are publicly traded FDIC insured financial institutions who are overexposed to
Construction & Development Loans and/or Nonfarm nonresidential real estate loans,
with “1-Engine”--Strong Sell, or “2-Engine”—Sell. The report also includes a listing of all
other engine-rated banks-- and those with “n/a” ratings but forecast figure data
points according to our models-- in violation of FDIC guidelines vis-a-vis loan
exposures.

Our latest ValuEngine FDIC Report UPDATE for May, 2010 is posted. The report contains
loan exposure and/or ValuEngine datapoints on valuation, forecast, and ratings for all
of the institutions on our List of Problem Banks.
Subscribers can download it HERE.
Others interested in the report may find out more on our website by clicking the image
below.