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No. of Recommendations: 3
Based on the latest VL results as of Monday’s data release, there are now two companies that qualify as 
BI Long candidates. The companies are Microsoft [MSFT] and Alcoa [AA].

Market Valuation: 
With slightly more than half of the DOW 30 companies future performance now updated, the market appears to be 
priced at parity.
Downside: -18%
Upside:   +18%

Long Buy Rules: 
I am using the following TTD rules for Long position considerations:
1. Year-over-Year EPS growth must > 10%, which are the next 4Q / current quarter + previous 3 quarters earnings results
2. VL 3-5 Year price appreciation > average price appreciation of the market
3. When calculating ROE and BV figures, ignore years when are negative, but must have at least 7+ years of data to be 
   included in final consideration
4. Avoid erratic ROE ratios, that is where they are > 2std deviations = Curr ROE > (10 Year Avg + 2 * Std Dev)
5. New rule: ROE and BV must have been updated by VL to be considered.

There is a separate tracking post that I post to tack the annual hold selection for the remainder of the year. 
I also added two new columns to this worksheet. They are: 1. An indication if VL has updated the current year’s 
BV and ROE. If yes, then the column will indicate TRUE, if not then FALSE. 2. An average of the previous 4 VL 
update’s Downside Price, showing the price’s discount to this value. This is a simple average of the past
four updates in the Downside price. This new metric was never mentioned in the TTD book, but it might be of  
use to consider in case baseline valuations swing in one period during the evaluation time frame.  

Evaluation time frame: 
Current = 2013
Benchmark = 2003 thru 2012

Summary of Results


	VL	        Current	ROE/BV	Down	Up     %<10Y   %<10Y	EPS	Div    3-5Y L 3-5Y H VL 3-5Y   ROE	
Ticker	Date	        Price	Updated	Price	Price	Down	Down4Qs	Delta   Yield   VL $	VL $	% Chg	<2STD	Name
CAT	22-Feb-13	87.48	TRUE	78	135	12%	15%	-12%	 2.4 	130	190	84%	FALSE	Caterpillar Inc.
JNJ	22-Feb-13	79.74	FALSE	70	87	13%	20%	6%	 3.1 	90	110	26%	FALSE	Johnson & Johnson
MCD	1-Mar-13	99.27	TRUE	80	110	24%	41%	8%	 3.1 	115	140	29%	FALSE	McDonald's Corp.
CVX	8-Mar-13	121	FALSE	101	142	20%	34%	12%	 3.0 	140	170	28%	FALSE	Chevron Corp.
XOM	8-Mar-13	89.29	TRUE	75	102	19%	29%	1%	 2.7 	110	135	38%	FALSE	Exxon Mobil Corp.
BA	15-Mar-13	84.82	TRUE	59	88	44%	83%	7%	 2.3 	95	130	33%	FALSE	Boeing
TRV	15-Mar-13	83.69	FALSE	56	79	49%	75%	15%	 2.2 	95	120	28%	FALSE	Travelers Cos.
UNH	15-Mar-13	54.46	TRUE	48	76	13%	27%	4%	 1.5 	85	115	81%	FALSE	UnitedHealth Group
T	22-Mar-13	36.43	TRUE	29	40	26%	37%	9%	 5.0 	45	50	31%	FALSE	AT&T Inc.
VZ	22-Mar-13	49.02	FALSE	26	36	88%	119%	19%	 4.2 	60	75	38%	FALSE	Verizon Communic.
CSCO	22-Mar-13	20.75	TRUE	29	46	-29%	-13%	8%	 2.7 	30	35	55%	FALSE	Cisco Systems
HD	29-Mar-13	69.56	FALSE	42	63	68%	96%	12%	 2.3 	70	90	16%	TRUE	Home Depot
PG	29-Mar-13	77.27	TRUE	56	72	37%	54%	3%	 2.9 	90	110	29%	FALSE	Procter & Gamble
INTC	4-Jan-13	21.33	FALSE	25	41	-15%	-25%	-6%	 4.3 	35	45	90%	FALSE	Intel Corp.
HPQ	4-Jan-13	23.04	TRUE	20	34	14%	-3%	122%	 2.6 	30	45	68%	FALSE	Hewlett-Packard
IBM	4-Jan-13	212	TRUE	151	211	40%	65%	8%	 1.7 	235	285	22%	FALSE	Int'l Business Mach.
AA	11-Jan-13	8.45	TRUE	12	23	-28%	50%	344%	 1.4 	15	25	136%	FALSE	Alcoa Inc.
DD	11-Jan-13	49.27	TRUE	47	70	6%	3%	15%	 3.6 	85	105	92%	FALSE	Du Pont
MRK	11-Jan-13	43.9	FALSE	33	54	31%	20%	-3%	 3.9 	45	55	14%	FALSE	Merck & Co.
PFE	11-Jan-13	28.38	FALSE	20	29	43%	94%	33%	 3.4 	30	35	-2%	FALSE	Pfizer Inc.
GE	18-Jan-13	23.37	FALSE	23	33	2%	16%	12%	 3.3 	30	45	82%	FALSE	Gen'l Electric
MMM	18-Jan-13	106	FALSE	86	122	23%	37%	9%	 2.4 	120	150	28%	FALSE	3M Company
UTX	18-Jan-13	93.59	FALSE	73	104	29%	50%	14%	 2.3 	115	140	43%	FALSE	United Technologies
KO	25-Jan-13	40.04	FALSE	33	44	23%	5%	10%	 2.8 	50	60	37%	FALSE	Coca-Cola
WMT	1-Feb-13	74.28	FALSE	72	91	3%	13%	8%	 2.6 	95	115	36%	FALSE	Wal-Mart Stores
DIS	8-Feb-13	56.78	TRUE	48	72	18%	30%	12%	 1.3 	60	75	28%	TRUE	Disney (Walt)
BAC	15-Feb-13	12.56	TRUE	10	16	24%	71%	240%	 0.3 	11	17	11%	FALSE	Bank of America
JPM	15-Feb-13	48.78	TRUE	48	77	1%	18%	8%	 2.9 	55	85	44%	FALSE	JPMorgan Chase
AXP	15-Feb-13	66.22	FALSE	58	87	13%	40%	10%	 1.2 	70	95	49%	FALSE	Amer. Express
MSFT	15-Feb-13	28.25	TRUE	35	51	-20%	-6%	23%	 3.3 	40	50	60%	FALSE	Microsoft Corp.

Dow30		        14,512  	11,870  17,163 	                         2.7  17,479  22,248 			Dow Jones Industrial Average
Appreciation Potential		  	-18%	   18%				        20%     53%     45%

Disclosures and Useful Terms
VL Date is the date of the last summary report update from Valueline as indicated in the post’s subject line.
All data sources from Valueline Dow30 reports made publically available on their website. http://www.valueline.com/Dow30/index.aspx

Current Price is the closing price of the stock as reported by VL, which is usually one week prior to the date 
of the time period mentioned in the posting subject line.

ROE/BV Updated is an indication if the stock’s BV and ROE have been updated through the end of the Benchmark 
evaluation time frame.

10Yr Down is the 10 year downside price. The company must have at least 7 years of non-negative ROE data to qualify.

10Yr Down4Qs is the 10 year downside price averaged over the previous 4 quarter’s valuation price.

10Yr Up is the 10 year upside price. The company must have at least 7 years of non-negative ROE data to qualify.

Both upside and downside are calculated using method outlined in TTD book.
Also a discussion of calculating the upside and downside can be found here:
http://boards.fool.com/Message.asp?mid=20916205&sort=who......

%<10Y Downside is the current price divided by the 10 Yr downside expressed as a percentage.

EPS Future Delta is the projected growth in EPS for the next 4 quarters versus the last four reported quarters.
I use the latest EPS data from the VL spreadsheet which are updated as soon as new earnings are reported.

Div Yield is the current % dividend payout ratio per share.

3-5 Y Low/Hi Price Est. is the downside/upside price estimate which is calculated using the projections of Book Value 
and ROE as discussed in TTD.

Min VL Price Appreciation is the expected change in price from current price to low end VL projected 3-5 year
appreciation price.

ROE >2STD is part of a margin of safety consideration, which is briefly discussed in TTD on pg 70-71. 

I compare the current year's ROE versus the last 10 years of ROE data. If the current ROE is greater than average (10 Yr
ROE) + (2 * stdev(10 Yr ROE)), than this column is TRUE, else it is FALSE. This tells me that the stock's ROE is much
higher than its historic average and should therefore be avoided.
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