October 5, 2011

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Market Driver
Apple (AAPL,$AAPL) Shares Provide Market Boost, ValuEngine Rates it a Buy
For a brief moment yesterday, it appeared that the disappointment over Apple's failure to release an iPhone 5 was going to add to an already bad day for the markets. When tech-heads voiced their displeasure with the "improved" iPhone 4S, tech investors dumped the stock. However, waiting in the wings were heavy hitters that like to buy the stock on dips. They piled into Apple when the stock declined and the rally for Apple led to a general market turnaround by the close. It is amazing how much power this company has developed over the years. It remains to be seen whether new CEO Tim Cook will be able to retain the "infallibility" of Steve Jobs. Today, the stock is up @ $22 from its interday low yesterday. Our model likes the stock right now and rates it a "4Engine" buy. Apple Computer, Inc. designs, manufactures and markets personal computers and related personal computing and communicating solutions for sale primarily to education, creative, consumer, and business customers.

ValuEngine has issued a BUY recommendation for APPLE INC on Oct. 05, 2011. Based on the information we have gathered and our resulting research, we feel that APPLE INC has the probability to OUTPERFORM average market performance for the next year. The company exhibits ATTRACTIVE company size, risk and 5-year annualized return. Based on available data as of Oct. 05, 2011, we believe that AAPL should be trading at $505.72. This makes AAPL 26.34% 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 AAPL, we base this on actual earnings per share (EPS) for the previous four quarters of $26.81, forecasted EPS for the next four quarters of $31.75, and correlations to the 30-year Treasury bond yield of 2.76%.
ValuEngine Forecast
Target Price* 1-Month 3-Month 6-Month 1-Year 2-Year 3-Year 380.61 381.21 382.05 393.71 405.64 412.99 Expected Return 2.18% 2.34% 2.56% 5.70% 8.90% 10.87%

Valuation & Rankings

Valuation 1-M Forecast Return 12-M Return Sharpe Ratio 5-Y Avg Annual Return Volatility Expected EPS Growth Market Cap (billions) Trailing P/E Ratio Forward P/E Ratio PEG Ratio Price/Sales Market/Book Beta Alpha 26.34% undervalued 2.18% 33.68% 0.81 31.53% 38.98% 18.44% 344.47 13.90 11.73 0.75 3.43 5.11 1.30 0.35 Valuation Rank 1-M Forecast Return Rank Momentum Rank Sharpe Ratio Rank 5-Y Avg Annual Rtn Rank Volatility Rank EPS Growth Rank Size Rank Trailing P/E Rank Forward P/E Ratio Rank PEG Ratio Rank Price/Sales Rank Market/Book Rank Beta Rank Alpha Rank 21 16 39 89 48 46 61 48 100 71 40 73 91 99 99

ValuEngine Market Overview

Summary of VE Stock Universe
Stocks Undervalued Stocks Overvalued Stocks Undervalued by 20% Stocks Overvalued by 20% 91.89% 8.11% 70.66% 3.11%

ValuEngine Sector Overview

Sector
Utilities Consumer Staples Retail-Wholesale Aerospace Multi-Sector Conglomerates Finance Business Services Transportation Consumer Discretionary Computer and Technology Medical Industrial Products Construction Auto-Tires-Trucks Basic Materials Oils-Energy

Change
1.90% 1.61% 3.50% 2.56% 2.46% 3.53% 3.69% 3.28% 2.74% 3.78% 1.88% 3.38% 3.86% 5.47% 1.27% 3.10%

MTD
2.04% 1.91% 3.96% 2.88% 2.74% 3.95% 4.13% 3.70% 3.15% 4.29% 2.20% 3.81% 4.26% 6.08% 1.56% 3.58%

YTD
-8.52% -20.87% -9.67% 0.01% -22.79% -17.20% -14.30% -23.97% -21.01% -17.86% -11.10% -24.68% -31.99% -37.32% -31.08% -28.97%

Valuation
14.90% undervalued 24.35% undervalued 25.17% undervalued 27.40% undervalued 27.65% undervalued 28.11% undervalued 28.42% undervalued 30.45% undervalued 31.82% undervalued 32.28% undervalued 33.01% undervalued 34.16% undervalued 36.04% undervalued 36.49% undervalued 37.64% undervalued 37.83% undervalued

Last 12- P/E MReturn Ratio

-0.19% -3.71% 6.27% 0.37% -5.35% -7.79% -4.70% -7.52% -6.59% -6.38% -2.11% -2.55% -19.96% -5.56% -5.36% -5.20% 22.96 15.33 23.18 16.05 20.00 22.67 34.97 18.86 22.94 30.84 23.96 20.19 33.74 15.49 27.00 31.06