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Executive Summary	May 8, 2015

The Economy Economic data remains mixed, with encouraging signs in the job market and service sector being counterbalanced by tepid growth in manufacturing and gross domestic product. GDP rose just 0.2% in the first quarter, according to a report from the Commerce Department. That figure may be adjusted downward, many analysts say, in light of newer data showing that the US trade deficit reached a six-and-a-half year high in March. Some said the increase was the result of the end of the West Coast dockworkers strikes, which had created a backlog of imports that have flooded back in. But exports have also been trending down, and others worried that the strong dollar has made US goods too expensive abroad. On the positive side, new claims for unemployment have fallen significantly since our last newsletter, and are 18.4% below year-ago levels. The four-week moving average of new claims is at its lowest level in 15 years Continuing claims, the data for which lag new claims by a week, also moved lower since our last newsletter and are 16.7% below year-ago levels. Earnings season has been in full swing, and bottom-line results have been pretty solid. With 360 of the S&P 500 companies having reported, 71% had beaten earnings estimates, according to FactSet. Top-line results have been much weaker, with 46% of firms beating sales estimates. In late March, analysts had expected earnings to decline at a 4.7% pace in the quarter, but so far the decline stands at 0.4%, with eight sectors having higher-than-expected growth rates due to upside earnings surprises. The manufacturing sector expanded in April for the 28th straight month, according to the Institute for Supply Management, though it did so at a fairly weak pace. New orders picked up and are at a pretty solid pace, which means manufacturing growth could pick up in coming months. ISM's service sector index was more impressive. It showed that the service sector expanded in April for the 63nd straight month, doing so at the fastest pace since November. New orders rose and are at a very high level, while employment conditions remained at about the same strong level they were in March. After several strong monthly gains, personal income was flat in March, according to the Commerce Department. Real disposable personal income, which also had jumped in recent months, fell 0.2%. The opposite was true of real personal consumption expenditures. Real PCE had been weak for several months, but jumped 0.3% in March, as consumers may be starting to spend the money they're saving on gas. The personal savings rate dipped from 5.7% to 5.3%, still a very healthy level. Speaking of gas, however, prices are rising again. As of May 6, a gallon of regular unleaded on average cost $2.64, up from $2.39 a month earlier. That's still far below the year-ago level of $3.67, but we'll have to see how much higher prices go. Since our last newsletter, the S&P 500 returned -1.2%, while the Hot List returned -2.2%. So far in 2015, the portfolio has returned 11.7% vs. 1.4% for the S&P. Since its inception in July 2003, the Hot List is far outpacing the index, having gained 261.4% vs. the S&P's 108.7% gain. The Importance Of A Plan The investment research firm Dalbar recently released its annual Quantitative Analysis of Investor Behavior, and, as usual, the data was not encouraging for individual investors. In 2014, according to Dalbar, the S&P 500 returned 13.7%, but the average equity mutual fund investor gained a mere 5.5%. And while the Barclays Aggregate Bond Index was gaining nearly 6%, the average fixed income mutual fund investor was gaining just 1.2%. While the 2014 results were particularly bad, they are merely part of a broader, long-term pattern of investors underperforming the broader market indices by wide margins. Over the past 30 years, the S&P 500 has returned 11.1% annualized, while the average equity mutual fund investor has gained just 3.8%, according to Dalbar. Returns for fixed income investors have been even worse. Over the past 3 decades, the Barclays index has averaged annualized returns of 7.4%; investors in fixed income funds gained an average of 0.7%. While fees no doubt take a bite out of investor returns, Dalbar indicates that the main reason for individual investors' terrible collective performance is behavioral. "Investor behavior is not simply buying and selling at the wrong time, it is the psychological traps, triggers and misconceptions that cause investors to act irrationally," the group says. "That irrationality leads to the buying and selling at the wrong time which leads to underperformance." I've often talked about the behavioral biases that hamper investors, and Dalbar offers its own list of nine specific behaviors that "tend to plague investors based on their personal experiences and unique personalities." They are: Loss Aversion -- Expecting to find high returns with low risk Narrow Framing -- Making decisions without considering all the implications Anchoring -- Relating to familiar experiences, even when not appropriate Mental Accounting -- Taking undue risk in one area and avoiding rational risk in others Diversification -- Seeking to reduce risk, but simply using other sources Herding -- Copying the behavior of others even in the face of unfavorable outcomes Regret -- Treating errors of commission more seriously than errors of omission Media Response -- Tendency to react to news without reasonable examination Optimism -- Belief that good things happen to me and bad things happen to others One of the particularly interesting pieces of data from this year's QAIB involves Dalbar's "guess right ratio". This measures the frequency that the average investor makes a correct call on the market's direction by looking at whether the market goes up or down the month after an investor has net inflows. While the average mutual fund investor greatly lagged the broader market in 2014, the average investor "guessed right" about the market's direction the following month in 8 of 12 months of the year. But some of the months when investors were wrong were months in which they made their largest bets. According to Dalbar, equity mutual fund inflows in December 2013 were the highest they'd been since December 2007, and the 4th highest they've ever been. The next month, January 2014, the S&P 500 lost 3.5%, its worst performance in more than 2 1/2 years. That's apparently not unique -- over the past 20 years, investors have "guessed right" at least 50% of the time in all but four years, but greatly lagged the market. The timing of when you guess right and guess wrong is critical. Other data from Dalbar shows just how critical it can be. The firm looked at the 10 months over the past 30 years in which investors lagged the S&P by the greatest percentage. The gap for a single month was as high as 7.4 percentage points -- that was in October 2008, around the height of the financial crisis. Not coincidentally, many of those 10 worst performing months came at major inflection points for the market -- September and October 2008, October 1987 (Black Monday), November 1997 (when markets rebounded after the October mini-crash associated with the "Asian Contagion" financial crisis), August 1998 (the Russian financial crisis), March 2000 (the end of the bull market/start of the tech crash), and November 2000 (during the indecision surrounding the US's Presidential election) are all on the list. All of these were highly emotional times, and it's when emotions are high that we humans make mistakes and let those pesky biases worm their way into our decision-making processes -- just when our potential returns are really on the line. Dalbar says that "no amount of prior education can adequately prevent the enveloping fear that exists when the [emotion-triggering] event is actually taking place," and to an extent that's true -- you will feel fear when markets are swinging wildly no matter what. But I believe that you can mitigate the impacts of fear and other emotions on your behavior (and your portfolio) through preparation. In a recent piece for Kiplinger magazine, Anne Kates Smith talked about the biases that impact investors and how you can combat them. "Crafting an investment policy statement -- and an exit strategy -- before the going gets rough helps take the emotion out of buying, selling and rebalancing decisions," she said, and I agree with that sentiment. As is the case with just about anything in life, the more you prepare for difficult times, the less likely you are to panic when difficult times do hit. With the Hot List, we've thought a great deal about how to handle market declines and turbulent times. In fact, our entire portfolio management system is designed to overcome the biases that dog investors. By using a purely quantitative system and buying and selling only at fixed intervals, we've created a system in which emotion has no place. When times get tough and the market starts falling, rules like these help us focus on the long-term and not get swayed by stress or emotion. If you set rules with the intent of keeping your emotions at bay, you feel as though you've failed if you break the rules; that's a good incentive to help keep you on track. I also think it's very important to familiarize yourself with market history. If you have researched past market cycles, you become familiar with several important notions -- that stocks have always rebounded from terrible economic, political, and social crises; that times when fears are high and the market is tumbling tend to be the best times to invest; that overly exuberant periods are often followed by market declines. Knowing all of that can offer comfort when things get tough. Those who aren't familiar with the market's resilience and behavioral finance, on the other hand, are likely to get overwhelmed when the market gets volatile. When and how the next market crisis hits is anyone's guess. But at some point, trouble will occur -- it's just the nature of the beast. Instead of trying to predict when it will happen -- which few, if any, people can do -- I'd advise that you think about what you will do when things get rough. Have a plan that will best serve your needs. Write down how you want to react when big declines hit, and what your rationale is. Then return back to that document when the going gets tough. Ready yourself while the skies are relatively clear, because when thunderstorms hit, most people are too busy worrying about the rain and lightning to think clearly.		Editor-in-Chief: John Reese Since Inception   Hot List 261.4% S&P 500 108.7% Accuracy 55.3% Beta 1.2 YTD   Hot List 11.7% S&P 500 1.4% Since Last Issue   Hot List -2.2% S&P 500 -1.2% Avg. Fundamentals   Market Cap (mil) $2,534 PE Ratio 13.2 5 Yr EPS Growth 26.7% Yield 0.5% Rel. Strength 75 Portfolio Sectors Financial 4 Services 2 Technology 1 Healthcare 1 Capital Goods 1 Consumer/Non-Cyclical 1
The Fallen As we rebalance the Validea Hot List, 4 stocks leave our portfolio. These include: Pilgrim's Pride Corporation (PPC), Sasol Limited (Adr) (SSL), Fossil Group Inc (FOSL) and Apple Inc. (AAPL). The Keepers 6 stocks remain in the portfolio. They are: Credit Acceptance Corp. (CACC), Sanderson Farms, Inc. (SAFM), Jones Lang Lasalle Inc (JLL), Universal Insurance Holdings, Inc. (UVE), Lannett Company, Inc. (LCI) and Chart Industries, Inc. (GTLS). The Newbies We are adding 4 stocks to the portfolio. These include: World Acceptance Corp. (WRLD), Eplus Inc. (PLUS), Amtrust Financial Services Inc (AFSI) and Trueblue Inc (TBI). Portfolio Changes Additions   WORLD ACCEPTANCE CORP. WRLD EPLUS INC. PLUS AMTRUST FINANCIAL SERVICES INC AFSI TRUEBLUE INC TBI Deletions   PILGRIM'S PRIDE CORPORATION PPC SASOL LIMITED (ADR) SSL FOSSIL GROUP INC FOSL APPLE INC. AAPL Newcomers to the Validea Hot List AmTrust Financial Services (AFSI): Founded as a workers' compensation insurance firm, this New York City-based company has expanded into a multi-national property and casualty insurer. It specializes in coverage for small businesses. AmTrust ($4.9 billion market cap) gets strong interest from my Peter Lynch-, Warren Buffett, and James O'Shaughnessy-based models and my Momentum Investor strategy. To read more about its fundamentals, see the "Detailed Stock Analysis" section below. ePlus Inc. (PLUS): Virginia-based ePlus helps organizations optimize their IT infrastructure and supply chain processes by delivering complex information technology solutions, which include managed and professional services and products from top manufacturers, flexible financing, and proprietary software. The 24-year-old firm has more than 950 associates serving commercial, state, municipal, and education customers nationally. ePlus ($615 million market cap) gets strong interest from my James O'Shaughnessy- and Peter Lynch-based models and my Momentum Investor approach. To read more about it, scroll down to the "Detailed Stock Analysis" section. World Acceptance Corp. (WRLD): This South Carolina-based small-cap ($880 million) specializes in making small, short-term loans in the southern and central U.S. and Mexico. It has taken in about $630 million in sales over the past year. World Acceptance gets strong interest from my James O'Shaughnessy-, Warren Buffett- and Peter Lynch-based models. For more on the stock, see the "Detailed Stock Analysis" section below. TrueBlue Inc. (TBI): Tacoma, Wash.-based TrueBlue provides temporary blue-collar staffing services to a variety of industries, including construction, manufacturing, transportation, aviation, waste, hospitality, retail, and renewable energy. It operates about 700 branches in all 50 states, Puerto Rico and Canada, and has taken in about $2.4 billion in sales over the past 12 months. TrueBlue ($1.2 billion market cap) gets strong interest from my Peter Lynch-based model. To read more about its fundamentals, check out the "Detailed Stock Analysis" section below. News about Validea Hot List Stocks Lannett Company (LCI): Lannett posted strong fiscal third-quarter profit results and improved guidance on May 6, but shares tumbled. Lannett posted net income of $36.2 million, or 97 cents per share, up sharply from $23.0 million, or 63 cents a share, in the year-ago period. The profit results beat analysts estimates of 95 cents per share, the Associated Press reported. Revenue was $99.4 million in the period, which was well above year-ago levels of $80 million but missed estimates of $100.7 million. Perhaps because of the revenue miss, Lannett shares tumbled more than 12% the day after the announcement. Still, Lannett increased its full-year revenue guidance to $403 million to $408 million, up from previous guidance of $395 million to $405 million. Given all of that, the stock seems like it may be a very good candidate for a strong bounce back. The Next Issue In two weeks, we will publish another issue of the Hot List, at which time we will take a closer look at my strategies and investment approach. If you have any questions, please feel free to contact us at hotlist@validea.com.

Current Portfolio Ticker Company Name Industry Guru Score UVE UNIVERSAL INSURANCE HOLDINGS, INC. Insurance (Prop. & Casualty) 96 AFSI AMTRUST FINANCIAL SERVICES INC Insurance (Prop. & Casualty) 96 GTLS CHART INDUSTRIES, INC. Misc. Capital Goods 85 SAFM SANDERSON FARMS, INC. Food Processing 76 WRLD WORLD ACCEPTANCE CORP. Consumer Financial Services 72 LCI LANNETT COMPANY, INC. Biotechnology & Drugs 69 CACC CREDIT ACCEPTANCE CORP. Consumer Financial Services 66 JLL JONES LANG LASALLE INC Real Estate Operations 62 PLUS EPLUS INC. Software & Programming 60 TBI TRUEBLUE INC Business Services 60 Ticker Market Cap Date Added Start Price Current Price Return UVE $974 3/13/2015 $24.58 $27.17 10.5% AFSI $4,810 5/8/2015 TBD $58.48 TBD GTLS $1,082 3/13/2015 $33.50 $35.42 5.7% SAFM $1,877 1/16/2015 $80.96 $80.98 0.0% WRLD $887 5/8/2015 TBD $93.05 TBD LCI $1,899 2/13/2015 $57.78 $53.04 -8.2% CACC $4,692 3/13/2015 $188.06 $227.81 21.1% JLL $7,315 2/13/2015 $161.15 $163.06 1.2% PLUS $618 5/8/2015 TBD $83.68 TBD TBI $1,183 5/8/2015 TBD $28.21 TBD

Detailed Stock Analysis Disclaimer: The analysis is from Validea's selection and interpretation of content from the guru's book or published writings, and is not from nor endorsed by the guru. See Full Disclaimer UVE   |   AFSI   |   GTLS   |   SAFM   |   WRLD   |   LCI   |   CACC   |   JLL   |   PLUS   |   TBI   |   UNIVERSAL INSURANCE HOLDINGS, INC. Profile Strategy: P/E/Growth Investor Based on: Peter Lynch Universal Insurance Holdings, Inc. (UIH) is a vertically integrated insurance holding company. The Company's insurance products are offered to its customers through Universal Property & Casualty Insurance Company (UPCIC) and American Platinum Property and Casualty Insurance Company (APPCIC), (collectively the Insurance Entities). Substantially all aspects of insurance underwriting, distribution and claims processing are covered through the Company's subsidiaries. Blue Atlantic Reinsurance Corporation (BARC), a wholly owned subsidiary of UIH, is a reinsurance intermediary broker. The Insurance Entities generate revenues primarily from the collection of premiums. Universal Risk Advisors, Inc. (URA), the Company's managing general agent, generates revenue through policy fee income and other administrative fees from the marketing of the Insurance Entities' insurance products through its distribution network of independent agents. Analysis Guru Score: 93% DETERMINE THE CLASSIFICATION: This methodology would consider UVE a "fast-grower". P/E/GROWTH RATIO: [PASS] The investor should examine the P/E (11.75) relative to the growth rate (35.56%), based on the average of the 3, 4 and 5 year historical eps growth rates, for a company. This is a quick way of determining the fairness of the price. In this particular case, the P/E/G ratio for UVE (0.33) is very favorable. SALES AND P/E RATIO: [NEUTRAL] For companies with sales greater than $1 billion, this methodology likes to see that the P/E ratio remain below 40. Large companies can have a difficult time maintaining a growth rate high enough to support a P/E above this threshold. UVE, whose sales are $398.8 million, is not considered large enough to apply the P/E ratio analysis. However, an investor can analyze the P/E ratio relative to the EPS growth rate. EPS GROWTH RATE: [PASS] This methodology favors companies that have several years of fast earnings growth, as these companies have a proven formula for growth that in many cases can continue many more years. This methodology likes to see earnings growth in the range of 20% to 50%, as earnings growth over 50% may be unsustainable. The EPS growth rate for UVE is 35.6%, based on the average of the 3, 4 and 5 year historical eps growth rates, which is considered 'OK'. However, it may be difficult to sustain such a high growth rate. TOTAL DEBT/EQUITY RATIO: [NEUTRAL] UVE is a financial company so debt to equity rules are not applied to determine the company's financial soundness. EQUITY/ASSETS RATIO: [PASS] This methodology uses the Equity/Assets Ratio as a way to determine a financial intermediary's health, as it is a better measure than the Debt/Equity Ratio. UVE's Equity/Assets ratio (25.00%) is extremely healthy and above the minimum 5% this methodology looks for, thus passing the criterion. RETURN ON ASSETS: [PASS] This methodology uses Return on Assets as a way to measure a financial intermediary's profitability. UVE's ROA (8.75%) is above the minimum 1% that this methodology looks for, thus passing the criterion. FREE CASH FLOW: [NEUTRAL] The Free Cash Flow/Price ratio, though not a requirement, is considered a bonus if it is above 35%. A positive Cash Flow (the higher the better) separates a wonderfully reliable investment from a shaky one. This methodology prefers not to invest in companies that rely heavily on capital spending. This ratio for UVE (9.94%) is too low to add to the attractiveness of the stock. Keep in mind, however, that it does not adversely affect the company as it is a bonus criteria. NET CASH POSITION: [NEUTRAL] Another bonus for a company is having a Net Cash/Price ratio above 30%. Lynch defines net cash as cash and marketable securities minus long term debt. According to this methodology, a high value for this ratio dramatically cuts down on the risk of the security. The Net Cash/Price ratio for UVE (8.55%) is too low to add to the attractiveness of this company. Keep in mind, however, that it does not adversely affect the company as it is a bonus criteria.   AMTRUST FINANCIAL SERVICES INC Profile Strategy: Patient Investor Based on: Warren Buffett Amtrust Financial Services, Inc., (AmTrust) is a provider of property and casualty insurance. The Company operates in four business segments: small commercial business, Specialty Risk and Extended Warranty, specialty program and personal lines reinsurance. Small Commercial Business segment provides workers' compensation to small businesses. The Company's Specialty Risk and Extended Warranty segment provides coverage for consumer and commercial goods and custom designed coverages. The Company's Specialty Program segment provides workers' compensation, package products, general liability, commercial auto liability, excess and surplus lines programs and other specialty commercial property and casualty insurance. The Company subsidiaries include: Technology Insurance Company, Inc. (TIC), Rochdale Insurance Company (RIC), AmTrust Insurance Company of Kansas, Inc. (AICK), AmTrust Lloyd's Insurance Company of Texas (ALIC), Oryx Insurance Brokerage, Inc. and TMI Solutions, LLC. Analysis Guru Score: 92% STAGE 1: "Is this a Buffett type company?" A bedrock principle for Buffett is that his type of company has a "durable competitive advantage" as compared to being a "price competitive" or "commodity" type of business. Companies with a "durable competitive advantage" are more likely to be found in these sub-industries: Brand Name Fast Food Restaurants, Brand Name Beverages, Brand Name Foods, Brand Name Toiletries and Household Products, Brand Name Clothing, Brand Name Prescription Drugs, Advertising, Advertising Agencies, TV, Newspapers, Magazines, Direct Mail, Repetitive Services for Businesses, Low Cost Producers of Insurance, furniture, or Low Cost Retailers. While you should be easily able to explain where the company's pricing power comes from (i.e. a strong regional brand image, a business tollgate, its main products are #1 or # 2 in its field and has been on the market for years and hasn't changed at all, a consumer or business ends up buying the same product many times in a year, etc. or having the lowest production cost among its competition), there are certain figures that one can look at that can qualify the company as having a durable competitive advantage. LOOK FOR EARNINGS PREDICTABILITY: [PASS] Buffett likes companies to have solid, stable earnings that are continually expanding. This allows him to accurately predict future earnings. Annual earnings per share from earliest to most recent were 0.73, 0.78, 1.35, 1.24, 1.56, 1.95, 2.29, 2.34, 3.56, 5.45. Buffett would consider AFSI's earnings predictable, although earnings have declined 1 time(s) in the past seven years, with the most recent decline 7 years ago. The dips have totaled 8.1%. AFSI's long term historical EPS growth rate is 30.3%, based on the average of the 3, 4 and 5 year historical eps growth rates, and it is expected to grow earnings 15.0% per year in the future, based on the analysts' consensus estimated long term growth rate. For the purposes of our analysis, we will use the more conservative of the two EPS growth numbers. LOOK FOR CONSISTENTLY HIGHER THAN AVERAGE RETURN ON EQUITY: [PASS] Buffett likes companies with above average return on equity of at least 15% or better, as this is an indicator that the company has a durable competitive advantage. US corporations have, on average, returned about 12% on equity over the last 30 years. The average ROE for AFSI, over the last ten years, is 20.7%, which is high enough to pass. It is not enough that the average be at least 15%. For each of the last 10 years, with the possible exception of the last fiscal year, the ROE must be at least 10% for Buffett to feel comfortable that the ROE is consistent. In addition, the average ROE over the last 3 years must also exceed 15%. The ROE for the last 10 years, from earliest to latest, is 40.6%, 15.2%, 22.8%, 20.9%, 17.9%, 17.8%, 17.0%, 15.1%, 18.5%, 20.8%, and the average ROE over the last 3 years is 18.1%, thus passing this criterion. LOOK FOR CONSISTENTLY HIGHER THAN AVERAGE RETURN ON ASSETS: [PASS] Buffett also requires, for financial companies, that the average Return On Assets (ROA) be at least 1% and consistent. Return On Assets is defined as the net earnings of the business divided by the total assets of the business. The average ROA for AFSI, over the last ten years, is 3.5%, which is high enough to pass. It is not enough that the average be at least 1%. For each of the last 10 years, with the possible exception of the last fiscal year, the ROA must be at least 1% for Buffett to feel comfortable that the ROA is consistent. The ROA for the last 10 years, from earliest to latest, is 7.8%, 4.2%, 3.8%, 2.6%, 3.0%, 3.1%, 2.6%, 2.3%, 2.4%, 3.1%, thus passing this criterion. LOOK AT CAPITAL EXPENDITURES: [PASS] Buffett likes companies that do not have major capital expenditures. That is, he looks for companies that do not need to spend a ton of money on major upgrades of plant and equipment or on research and development to stay competitive. AFSI's free cash flow per share of $12.70 is positive, indicating that the company is generating more cash that it is consuming. This is a favorable sign, and so the company passes this criterion. LOOK AT MANAGEMENT'S USE OF RETAINED EARNINGS: [PASS] Buffett likes to see if management has spent retained earnings in a way that benefits shareholders. To figure this out, Buffett takes the total amount of retained earnings over the previous ten years of $18.44 and compares it to the gain in EPS over the same period of $4.72. AFSI's management has proven it can earn shareholders a 25.6% return on the earnings they kept. This return is more than acceptable to Buffett. Essentially, management is doing a great job putting the retained earnings to work. HAS THE COMPANY BEEN BUYING BACK SHARES: [NEUTRAL] Buffett likes to see falling shares outstanding, which indicates that the company has been repurchasing shares. This indicates that management has been using excess capital to increase shareholder value. AFSI's shares outstanding have not fallen in either the current year or the last 3 or 5 years and so it fails this criterion. This is a bonus criterion and will not adversely affect the ability of a stock to pass the strategy as a whole if it is failed. The preceding concludes Buffett's qualitative analysis. If and when he gets positive responses to all the above criteria, he would then proceed with a price analysis. The price analysis will determine whether or not the stock should be bought. The following is how he would evaluate AFSI quantitatively. STAGE 2: "Should I buy at this price?" Although a firm may be a Buffett type company, he won't invest in it unless he can get a favorable price that allows him a great long term return. CALCULATE THE INITIAL RATE OF RETURN: [No Pass/Fail] Buffett compares his type of stocks to bonds, and likes to see what a company's initial rate of return is. To calculate the initial rate of return, take the trailing 12-month EPS of $6.04 and divide it by the current market price of $58.48. An investor, purchasing AFSI, could expect to receive a 10.33% initial rate of return. Furthermore, he or she could expect the rate to increase 15.0% per year, based on the analysts' consensus estimated long term growth rate, as this is how fast earnings are growing. COMPARE THE INITIAL RATE OF RETURN WITH THE LONG-TERM TREASURY YIELD: [PASS] Buffett favors companies in which the initial rate of return is around the long-term treasury yield. Nonetheless, he has invested in companies with low initial rates of return, as long as the yield is expected to expand rapidly. Currently, the long-term treasury yield is about 2.75%. Compare this with AFSI's initial yield of 10.33%, which will expand at an annual rate of 15.0%, based on the analysts' consensus estimated long term growth rate. The company is the better choice, as the initial rate of return is close to or above the long term bond yield and is expanding. CALCULATE THE FUTURE EPS: [No Pass/Fail] AFSI currently has a book value of $24.54. It is safe to say that if AFSI can preserve its average rate of return on equity of 18.1% and continues to retain 87.05% of its earnings, it will be able to sustain an earnings growth rate of 15.8% and it will have a book value of $106.28 in ten years. If it can still earn 18.1% on equity in ten years, then expected EPS will be $19.27. CALCULATE THE FUTURE STOCK PRICE BASED ON THE AVERAGE ROE METHOD: [No Pass/Fail] Now take the expected future EPS of $19.27 and multiply them by the lower of the 5 year average P/E ratio or current P/E ratio (9.7) (5 year average P/E in this case), which is 9.6 and you get AFSI's projected future stock price of $184.25. CALCULATE THE EXPECTED RATE OF RETURN BASED ON THE AVERAGE ROE METHOD: [No Pass/Fail] Now add in the total expected dividend pool to be paid over the next ten years, which is $18.26. This gives you a total dollar amount of $202.51. These numbers indicate that one could expect to make a 13.2% average annual return on AFSI's stock at the present time. Although, the return is slightly below the liking of Buffett, the return would still be somewhat acceptable. CALCULATE THE EXPECTED FUTURE STOCK PRICE BASED ON AVERAGE EPS GROWTH: [No Pass/Fail] If you take the EPS growth of 15.0%, based on the analysts' consensus estimated long term growth rate, you can project EPS in ten years to be $24.44. Now multiply EPS in 10 years by the lower of the 5 year average P/E ratio or current P/E ratio (9.7) (5 year average P/E in this case), which is 9.6. This equals the future stock price of $233.60. Add in the total expected dividend pool of $18.26 to get a total dollar amount of $251.86. CALCULATE THE EXPECTED RETURN USING THE AVERAGE EPS GROWTH METHOD: [No Pass/Fail] Now you can figure out your expected return based on a current price of $58.48 and the future expected stock price, including the dividend pool, of $251.86. If you were to invest in AFSI at this time, you could expect a 15.72% average annual return on your money. Buffett would consider this a great return. LOOK AT THE RANGE OF EXPECTED RATE OF RETURN: [PASS] Based on the two different methods, you could expect an annual compounding rate of return somewhere between 13.2% and 15.7%. To pinpoint the average return a little better, we have taken an average of the two different methods. Investors could expect an average return of 14.5% on AFSI stock for the next ten years, based on the current fundamentals. Buffett likes to see a 15% return, but nonetheless would accept this return, thus passing the criterion.   CHART INDUSTRIES, INC. Profile Strategy: Value Investor Based on: Benjamin Graham Chart Industries, Inc. is an independent global manufacturer of engineered equipment used in the production, storage and end-use of hydrocarbon and industrial gases. The Company supplies engineered equipment used throughout the global liquid gas supply chain. It operates in three segments: energy and chemicals (E&C), distribution and storage or (D&S), and biomedical. The E&C and D&S segments manufacture products used primarily in energy-related and general industrial applications, such as the separation, liquefaction, distribution and storage of hydrocarbon and industrial gases. Through its BioMedical segment, it supplies cryogenic and other equipment used in the storage and distribution of biological materials and oxygen, used primarily in the medical, biological research and animal breeding industries. Analysis Guru Score: 100% SECTOR: [PASS] GTLS is neither a technology nor financial Company, and therefore this methodology is applicable. SALES: [PASS] The investor must select companies of "adequate size". This includes companies with annual sales greater than $340 million. GTLS's sales of $1,171.8 million, based on trailing 12 month sales, pass this test. CURRENT RATIO: [PASS] The current ratio must be greater than or equal to 2. Companies that meet this criterion are typically financially secure and defensive. GTLS's current ratio of 2.22 passes the test. LONG-TERM DEBT IN RELATION TO NET CURRENT ASSETS: [PASS] For industrial companies, long-term debt must not exceed net current assets (current assets minus current liabilities). Companies that meet this criterion display one of the attributes of a financially secure organization. The long-term debt for GTLS is $206.9 million, while the net current assets are $336.1 million. GTLS passes this test. LONG-TERM EPS GROWTH: [PASS] Companies must increase their EPS by at least 30% over a ten-year period and EPS must not have been negative for any year within the last 5 years. Companies with this type of growth tend to be financially secure and have proven themselves over time. GTLS's EPS growth over that period of 166.8% passes the EPS growth test. P/E RATIO: [PASS] The Price/Earnings (P/E) ratio, based on the greater of the current PE or the PE using average earnings over the last 3 fiscal years, must be "moderate", which this methodology states is not greater than 15. Stocks with moderate P/Es are more defensive by nature. GTLS's P/E of 14.51 (using the current PE) passes this test. PRICE/BOOK RATIO: [PASS] The Price/Book ratio must also be reasonable. That is, the Price/Book multiplied by P/E cannot be greater than 22. GTLS's Price/Book ratio is 1.23, while the P/E is 14.51. GTLS passes the Price/Book test.   SANDERSON FARMS, INC. Profile Strategy: Value Investor Based on: Benjamin Graham Sanderson Farms, Inc. is a poultry processing company which is engaged in the production, processing, marketing and distribution of fresh and frozen chicken and other prepared chicken items. In addition, the Company is engaged in the processing, marketing and distribution of prepared chicken through its wholly owned subsidiary, Sanderson Farms, Inc. (Foods Division). It produces a range of processed chicken products and prepared chicken items. It sells ice pack, chill pack, bulk pack and frozen chicken, in whole, cut-up and boneless form, under the Sanderson Farms brand name to retailers, distributors, and casual dining operators in the south-eastern, south-western, north-eastern and western United States and to customers who resell frozen chicken into export markets. During the fiscal year ended October 31, 2013 (fiscal 2013), it processed 452 million chickens, or over 3.0 billion dressed pounds. Analysis Guru Score: 71% SECTOR: [PASS] SAFM is neither a technology nor financial Company, and therefore this methodology is applicable. SALES: [PASS] The investor must select companies of "adequate size". This includes companies with annual sales greater than $340 million. SAFM's sales of $2,857.3 million, based on trailing 12 month sales, pass this test. CURRENT RATIO: [PASS] The current ratio must be greater than or equal to 2. Companies that meet this criterion are typically financially secure and defensive. SAFM's current ratio of 3.73 passes the test. LONG-TERM DEBT IN RELATION TO NET CURRENT ASSETS: [PASS] For industrial companies, long-term debt must not exceed net current assets (current assets minus current liabilities). Companies that meet this criterion display one of the attributes of a financially secure organization. The long-term debt for SAFM is $10.0 million, while the net current assets are $398.0 million. SAFM passes this test. LONG-TERM EPS GROWTH: [FAIL] Companies must increase their EPS by at least 30% over a ten-year period and EPS must not have been negative for any year within the last 5 years. EPS for SAFM were negative within the last 5 years and therefore the company fails this criterion. P/E RATIO: [PASS] The Price/Earnings (P/E) ratio, based on the greater of the current PE or the PE using average earnings over the last 3 fiscal years, must be "moderate", which this methodology states is not greater than 15. Stocks with moderate P/Es are more defensive by nature. SAFM's P/E of 12.90 (using the 3 year PE) passes this test. PRICE/BOOK RATIO: [FAIL] The Price/Book ratio must also be reasonable. That is, the Price/Book multiplied by P/E cannot be greater than 22. SAFM's Price/Book ratio is 1.95, while the P/E is 12.90. SAFM fails the Price/Book test.   WORLD ACCEPTANCE CORP. Profile Strategy: P/E/Growth Investor Based on: Peter Lynch World Acceptance Corporation operates a small-loan consumer finance business in fourteen states and Mexico. The Company is engaged in the small-loan consumer finance business, offering short-term small loans, medium-term larger loans, related credit insurance and ancillary products and services to individuals. The Company offers standardized installment loans of between $300 and $4,000 through 1,271 offices in Alabama, Georgia, Illinois, Indiana, Kentucky, Louisiana, Mississippi, Missouri, New Mexico, Oklahoma, South Carolina, Texas, Tennessee, Wisconsin and Mexico as of March 31, 2014. The Company serves individuals with limited access to consumer credit from banks, credit unions, other consumer finance businesses and credit card lenders. In the United States offices, the Company also offers income tax return preparation services to its customers and others. Analysis Guru Score: 93% DETERMINE THE CLASSIFICATION: This methodology would consider WRLD a "fast-grower". P/E/GROWTH RATIO: [PASS] The investor should examine the P/E (7.90) relative to the growth rate (21.28%), based on the average of the 3, 4 and 5 year historical eps growth rates, for a company. This is a quick way of determining the fairness of the price. In this particular case, the P/E/G ratio for WRLD (0.37) is very favorable. SALES AND P/E RATIO: [NEUTRAL] For companies with sales greater than $1 billion, this methodology likes to see that the P/E ratio remain below 40. Large companies can have a difficult time maintaining a growth rate high enough to support a P/E above this threshold. WRLD, whose sales are $629.5 million, is not considered large enough to apply the P/E ratio analysis. However, an investor can analyze the P/E ratio relative to the EPS growth rate. EPS GROWTH RATE: [PASS] This methodology favors companies that have several years of fast earnings growth, as these companies have a proven formula for growth that in many cases can continue many more years. This methodology likes to see earnings growth in the range of 20% to 50%, as earnings growth over 50% may be unsustainable. The EPS growth rate for WRLD is 21.3%, based on the average of the 3, 4 and 5 year historical eps growth rates, which is considered very good. TOTAL DEBT/EQUITY RATIO: [NEUTRAL] WRLD is a financial company so debt to equity rules are not applied to determine the company's financial soundness. EQUITY/ASSETS RATIO: [PASS] This methodology uses the Equity/Assets Ratio as a way to determine a financial intermediary's health, as it is a better measure than the Debt/Equity Ratio. WRLD's Equity/Assets ratio (36.00%) is extremely healthy and above the minimum 5% this methodology looks for, thus passing the criterion. RETURN ON ASSETS: [PASS] This methodology uses Return on Assets as a way to measure a financial intermediary's profitability. WRLD's ROA (12.92%) is above the minimum 1% that this methodology looks for, thus passing the criterion.   LANNETT COMPANY, INC. Profile Strategy: Small-Cap Growth Investor Based on: Motley Fool Lannett Company, Inc. develops, manufactures, packages, markets and distributes solid oral (tablets and capsules), extended release, topical and oral solution finished dosage forms of drugs. The Company also manufactures active pharmaceutical ingredients through its Cody Laboratories, Inc. (Cody Labs) subsidiary. The Company operates pharmaceutical manufacturing plants in Philadelphia, Pennsylvania and Cody, Wyoming. Customers of the Company's pharmaceutical products include generic pharmaceutical distributors, drug wholesalers, chain drug stores, private label distributors, mail-order pharmacies, other pharmaceutical manufacturers, managed care organizations, hospital buying groups, Governmental entities and health maintenance organizations. The Company's products include Levothyroxine Sodium tablets, Digoxin tablets, Butalbital, Cocaine Topical Solution and Morphine Sulfate Oral Solution. Analysis Guru Score: 91% PROFIT MARGIN: [PASS] This methodology seeks companies with a minimum trailing 12 month after tax profit margin of 7%. The companies that pass this criterion have strong positions within their respective industries and offer greater shareholder returns. A true test of the quality of a company is that they can sustain this margin. LCI's profit margin of 34.25% passes this test. RELATIVE STRENGTH: [PASS] The investor must look at the relative strength of the company in question. Companies whose relative strength is 90 or above (that is, the company outperforms 90% or more of the market for the past year), are considered attractive. Companies whose price has been rising much quicker than the market tend to keep rising. LCI, with a relative strength of 91, satisfies this test. COMPARE SALES AND EPS GROWTH TO THE SAME PERIOD LAST YEAR: [PASS] Companies must demonstrate both revenue and net income growth of at least 25% as compared to the prior year. These growth rates give you the dynamic companies that you are looking for. These rates for LCI (146.94% for EPS, and 70.53% for Sales) are good enough to pass. INSIDER HOLDINGS: [PASS] LCI's insiders should own at least 10% (they own 17.09% ) of the company's outstanding shares which is the minimum required. A high percentage typically indicates that the insiders are confident that the company will do well. CASH FLOW FROM OPERATIONS: [PASS] A positive cash flow is typically used for internal expansion, acquisitions, dividend payments, etc. A company that generates rather than consumes cash is in much better shape to fund such activities on their own, rather than needing to borrow funds to do so. LCI's free cash flow of $0.54 per share passes this test. PROFIT MARGIN CONSISTENCY: [PASS] LCI's profit margin has been consistent or even increasing over the past three years (Current year: 20.86%, Last year: 8.82%, Two years ago: 3.21%), passing the requirement. It is a sign of good management and a healthy and competitive enterprise. R&D AS A PERCENTAGE OF SALES: [FAIL] LCI has reduced their R&D expenditures(currently $27.7 million) over the past two years which is unacceptable. LCI is jeopardizing the future in order to boost current EPS numbers. This criterion is particularly important for high-tech and medical stocks because they are so R&D dependant. CASH AND CASH EQUIVALENTS: [PASS] LCI's level of cash $146.3 million passes this criteria. If a company is a cash generator, like LCI, it has the ability to pay off debt (if it has any) or acquire other companies. Most importantly, good operations generate cash. INVENTORY TO SALES: [PASS] This methodology strongly believes that companies, especially small ones, should have tight control over inventory. It's a warning sign if a company's inventory relative to sales increases significantly when compared to the previous year. Up to a 30% increase is allowed, but no more. Inventory to Sales for LCI was 21.54% last year, while for this year it is 16.38%. Since the inventory to sales is decreasing by -5.16% the stock passes this criterion. ACCOUNT RECEIVABLE TO SALES: [PASS] This methodology wants to make sure that a company's accounts receivable do not get significantly out of line with sales. It's a warning sign if a company's accounts receivable relative to sales increases significantly when compared to the previous year. Up to a 30% increase is allowed, but no more. Accounts Receivable to Sales for LCI was 17.48% last year, while for this year it is 22.40%. Although the AR to sales is rising, it is below the max 30% that is allowed. The investor can still consider the stock if all other criteria appear very attractive. LONG TERM DEBT/EQUITY RATIO: [PASS] LCI's trailing twelve-month Debt/Equity ratio (0.25%) is a little higher than what this methodology is looking for, but is still at an acceptable level. The superior companies that you are looking for don't need to borrow money in order to grow. This company has borrowed very little which is still OK. "THE FOOL RATIO" (P/E TO GROWTH): [PASS] The "Fool Ratio" is an extremely important aspect of this analysis. If the company has attractive fundamentals and its Fool Ratio is 0.5 or less (LCI's is 0.33), the shares are looked upon favorably. These high quality companies can often wind up as the biggest winners. LCI passes this test. The following criteria for LCI are less important which means you would place less emphasis on them when making your investment decision using this strategy: AVERAGE SHARES OUTSTANDING: [PASS] LCI has not been significantly increasing the number of shares outstanding within recent years which is a good sign. LCI currently has 37.0 million shares outstanding. This means the company is not taking any measures, with regards to the number of shares, that will dilute or devalue the stock. SALES: [PASS] Companies with sales less than $500 million should be chosen. It is among these small-cap stocks that investors can find "an uncut gem", ones that institutions won't be able to buy yet. LCI's sales of $368.8 million based on trailing 12 month sales, are fine, making this company one such "prospective gem". LCI passes the sales test. DAILY DOLLAR VOLUME: [FAIL] LCI does not pass the Daily Dollar Volume (DDV of $51.3 million) test. It exceeds the maximum requirement of $25 million. Stocks that fail the test are too liquid for a small individual investor and many institutions have already discovered it. PRICE: [PASS] This is a very insignificant criterion for this methodology. But basically, low prices are chosen because "small numbers multiply more rapidly than large ones" and the potential for big returns expands. LCI with a price of $53.04 passes the price test, even though it doesn't fall in the preferred range. The price should be above $7 in order to eliminate penny stocks and below $20 since most stocks in this price range are undiscovered by the institutions. INCOME TAX PERCENTAGE: [PASS] LCI's income tax paid expressed as a percentage of pretax income this year was (36.50%) and last year (35.30%) are greater than 20% which is an acceptable level. If the tax rate is below 20% this could mean that the earnings that were reported were unrealistically inflated due to the lower level of income tax paid. This is a concern.   CREDIT ACCEPTANCE CORP. Profile Strategy: Growth Investor Based on: Martin Zweig Credit Acceptance Corporation is a provider of financing programs to automobile dealers that enable them to sell vehicles to consumers, regardless of their credit history. The Company's financing programs are offered through a nationwide network of automobile dealers who benefit from sales of vehicles to consumers who otherwise could not obtain financing; from repeat and referral sales generated by these same customers; and from sales to customers responding to advertisements. Credit Acceptance has two programs: the Portfolio Program and the Purchase Program. Under the Portfolio Program, it advances money to Dealer-Partners (referred to as a Dealer Loan) in exchange for the right to service the underlying Consumer Loans. Under the Purchase Program, Credit Acceptance buys the Consumer Loans from the Dealer-Partners (referred to as a Purchased Loan) and keeps all amounts collected from the consumer. Dealer Loans and Purchased Loans are collectively referred to as Loans. Analysis Guru Score: 92% P/E RATIO: [PASS] The P/E of a company must be greater than 5 to eliminate weak companies, but not more than 3 times the current Market P/E because the situation is much too risky, and never greater than 43. CACC's P/E is 17.09, based on trailing 12 month earnings, while the current market PE is 18.00. Therefore, it passes the first test. REVENUE GROWTH IN RELATION TO EPS GROWTH: [FAIL] Revenue Growth must not be substantially less than earnings growth. For earnings to continue to grow over time they must be supported by a comparable or better sales growth rate and not just by cost cutting or other non-sales measures. CACC's revenue growth is 12.65%, while it's earnings growth rate is 20.05%, based on the average of the 3, 4 and 5 year historical eps growth rates. Therefore, CACC fails this criterion. SALES GROWTH RATE: [PASS] Another important issue regarding sales growth is that the rate of quarterly sales growth is rising. To evaluate this, the change from this quarter last year to the present quarter (9.8%) must be examined, and then compared to the previous quarter last year compared to the previous quarter (5.6%) of the current year. Sales growth for the prior must be greater than the latter. For CACC this criterion has been met. The earnings numbers of a company should be examined from various different angles. Three of these angles are stability in the trend of earnings, earnings persistence, and earnings acceleration. To evaluate stability, the stock has to pass the following four criteria. CURRENT QUARTER EARNINGS: [PASS] The first of these criteria is that the current EPS be positive. CACC's EPS ($3.41) pass this test. QUARTERLY EARNINGS ONE YEAR AGO: [PASS] The EPS for the quarter one year ago must be positive. CACC's EPS for this quarter last year ($2.12) pass this test. POSITIVE EARNINGS GROWTH RATE FOR CURRENT QUARTER: [PASS] The growth rate of the current quarter's earnings compared to the same quarter a year ago must also be positive. CACC's growth rate of 60.85% passes this test. EARNINGS GROWTH RATE FOR THE PAST SEVERAL QUARTERS: [PASS] Compare the earnings growth rate of the previous three quarters with long-term EPS growth rate. Earnings growth in the previous 3 quarters should be at least half of the long-term EPS growth rate. Half of the long-term EPS growth rate for CACC is 10.02%. This should be less than the growth rates for the 3 previous quarters, which are 19.53%, 22.91%, and 24.29%. CACC passes this test, which means that it has good, reasonably steady earnings. This strategy looks at the rate which earnings grow and evaluates this rate of growth from different angles. The 4 tests immediately following are detailed below. EPS GROWTH FOR CURRENT QUARTER MUST BE GREATER THAN PRIOR 3 QUARTERS: [PASS] If the growth rate of the prior three quarter's earnings, 22.32%, (versus the same three quarters a year earlier) is less than the growth rate of the current quarter earnings, 60.85%, (versus the same quarter one year ago) then the stock passes. EPS GROWTH FOR CURRENT QUARTER MUST BE GREATER THAN THE HISTORICAL GROWTH RATE: [PASS] The EPS growth rate for the current quarter, 60.85% must be greater than or equal to the historical growth which is 20.05%. CACC would therefore pass this test. EARNINGS PERSISTENCE: [PASS] Companies must show persistent yearly earnings growth. To fulfill this requirement a company's earnings must increase each year for a five year period. CACC, whose annual EPS growth before extraordinary items for the previous 5 years (from the earliest to the most recent fiscal year) were 5.67, 7.07, 8.58, 10.54 and 11.92, passes this test. LONG-TERM EPS GROWTH: [PASS] One final earnings test required is that the long-term earnings growth rate must be at least 15% per year. CACC's long-term growth rate of 20.05%, based on the average of the 3, 4 and 5 year historical eps growth rates, passes this test. INSIDER TRANSACTIONS: [PASS] A factor that adds to a stock's attractiveness is if insider buy transactions number 3 or more, while insider sell transactions are zero. Zweig calls this an insider buy signal. For CACC, this criterion has not been met (insider sell transactions are 376, while insiders buying number 66). Despite the fact that insider sells out number insider buys for this company, Zweig considers even one insider buy transaction enough to prevent an insider sell signal, therefore there is not an insider sell signal and the stock passes this criterion.   JONES LANG LASALLE INC Profile Strategy: Growth Investor Based on: Martin Zweig Jones Lang LaSalle Incorporated (Jones Lang LaSalle), is a financial and professional services firm specializing in real estate. Jones Lang LaSalle has over 200 corporate offices worldwide and operations in more than 1,000 locations in 70 countries. The Company offers integrated real estate and investment management services on a local, regional and global basis to owner, occupier and investor clients. It delivers an array of Real Estate Services (RES) across its three geographic business segments: the Americas, Europe, Middle East and Africa (EMEA), and Asia Pacific. LaSalle Investment Management, a wholly owned member of the Jones Lang LaSalle group that consists of its fourth business segment, is a diversified real estate investment management company. In July 2014, Jones Lang LaSalle Inc acquired CLEO Construction Management (CLEO), a construction project management services firm that specializes in medical facilities. Analysis Guru Score: 85% P/E RATIO: [PASS] The P/E of a company must be greater than 5 to eliminate weak companies, but not more than 3 times the current Market P/E because the situation is much too risky, and never greater than 43. JLL's P/E is 17.94, based on trailing 12 month earnings, while the current market PE is 18.00. Therefore, it passes the first test. REVENUE GROWTH IN RELATION TO EPS GROWTH: [FAIL] Revenue Growth must not be substantially less than earnings growth. For earnings to continue to grow over time they must be supported by a comparable or better sales growth rate and not just by cost cutting or other non-sales measures. JLL's revenue growth is 15.71%, while it's earnings growth rate is 28.39%, based on the average of the 3 and 4 year historical eps growth rates. Therefore, JLL fails this criterion. SALES GROWTH RATE: [PASS] Another important issue regarding sales growth is that the rate of quarterly sales growth is rising. To evaluate this, the change from this quarter last year to the present quarter (16%) must be examined, and then compared to the previous quarter last year compared to the previous quarter (15.9%) of the current year. Sales growth for the prior must be greater than the latter. For JLL this criterion has been met. The earnings numbers of a company should be examined from various different angles. Three of these angles are stability in the trend of earnings, earnings persistence, and earnings acceleration. To evaluate stability, the stock has to pass the following four criteria. CURRENT QUARTER EARNINGS: [PASS] The first of these criteria is that the current EPS be positive. JLL's EPS ($0.92) pass this test. QUARTERLY EARNINGS ONE YEAR AGO: [PASS] The EPS for the quarter one year ago must be positive. JLL's EPS for this quarter last year ($0.35) pass this test. POSITIVE EARNINGS GROWTH RATE FOR CURRENT QUARTER: [PASS] The growth rate of the current quarter's earnings compared to the same quarter a year ago must also be positive. JLL's growth rate of 162.86% passes this test. EARNINGS GROWTH RATE FOR THE PAST SEVERAL QUARTERS: [PASS] Compare the earnings growth rate of the previous three quarters with long-term EPS growth rate. Earnings growth in the previous 3 quarters should be at least half of the long-term EPS growth rate. Half of the long-term EPS growth rate for JLL is 14.19%. This should be less than the growth rates for the 3 previous quarters, which are 54.90%, 64.29%, and 31.29%. JLL passes this test, which means that it has good, reasonably steady earnings. This strategy looks at the rate which earnings grow and evaluates this rate of growth from different angles. The 4 tests immediately following are detailed below. EPS GROWTH FOR CURRENT QUARTER MUST BE GREATER THAN PRIOR 3 QUARTERS: [PASS] If the growth rate of the prior three quarter's earnings, 43.66%, (versus the same three quarters a year earlier) is less than the growth rate of the current quarter earnings, 162.86%, (versus the same quarter one year ago) then the stock passes. EPS GROWTH FOR CURRENT QUARTER MUST BE GREATER THAN THE HISTORICAL GROWTH RATE: [PASS] The EPS growth rate for the current quarter, 162.86% must be greater than or equal to the historical growth which is 28.39%. JLL would therefore pass this test. EARNINGS PERSISTENCE: [PASS] Companies must show persistent yearly earnings growth. To fulfill this requirement a company's earnings must increase each year for a five year period. JLL, whose annual EPS growth before extraordinary items for the previous 5 years (from the earliest to the most recent fiscal year) were 3.48, 3.70, 4.63, 5.98 and 8.52, passes this test. LONG-TERM EPS GROWTH: [PASS] One final earnings test required is that the long-term earnings growth rate must be at least 15% per year. JLL's long-term growth rate of 28.39%, based on the average of the 3 and 4 year historical eps growth rates, passes this test. TOTAL DEBT/EQUITY RATIO: [PASS] A final criterion is that a company must not have a high level of debt. A high level of total debt, due to high interest expenses, can have a very negative effect on earnings if business moderately turns down. If a company does have a high level, an investor may want to avoid this stock altogether. JLL's Debt/Equity (27.13%) is not considered high relative to its industry (143.38%) and passes this test. INSIDER TRANSACTIONS: [PASS] A factor that adds to a stock's attractiveness is if insider buy transactions number 3 or more, while insider sell transactions are zero. Zweig calls this an insider buy signal. For JLL, this criterion has not been met (insider sell transactions are 219, while insiders buying number 224). Despite the lack of an insider buy signal, there also is not an insider sell signal, so the stock passes this criterion.   EPLUS INC. Profile Strategy: P/E/Growth Investor Based on: Peter Lynch ePlus inc. (ePlus) along with its subsidiaries design, implement and provide provide leading information technology (IT) products and services, flexible leasing and financing solutions, and enterprise supply management to enable its customers to optimize their IT infrastructure and supply chain processes. They are focused primarily on specialized IT segments including data center infrastructure, networking, security, cloud and collaboration. Its solutions incorporate hardware and software products from multiple leading IT vendors, as well as third party services, maintenance and software assurance on the hardware and software products. The Company operates in two segments: technology segment and financing segment. Technology segment includes sales of information technology products, third-party software, third-party maintenance, advanced professional and managed services. Its financing segment consists of the financing of IT equipment, software. Analysis Guru Score: 91% DETERMINE THE CLASSIFICATION: This methodology would consider PLUS a "fast-grower". P/E/GROWTH RATIO: [PASS] The investor should examine the P/E (13.97) relative to the growth rate (23.42%), based on the average of the 3, 4 and 5 year historical eps growth rates, for a company. This is a quick way of determining the fairness of the price. In this particular case, the P/E/G ratio for PLUS (0.60) makes it favorable. SALES AND P/E RATIO: [PASS] For companies with sales greater than $1 billion, this methodology likes to see that the P/E ratio remain below 40. Large companies can have a difficult time maintaining a growth high enough to support a P/E above this threshold. PLUS, whose sales are $1,135.9 million, needs to have a P/E below 40 to pass this criterion. PLUS's P/E of (13.97) is considered acceptable. INVENTORY TO SALES: [PASS] When inventories increase faster than sales, it is a red flag. However an increase of up to 5% is considered bearable if all other ratios appear attractive. Inventory to sales for PLUS was 1.51% last year, while for this year it is 2.14%. Since inventory has been rising, this methodology would not look favorably at the stock but would not completely eliminate it from consideration as the inventory increase (0.63%) is below 5%. EPS GROWTH RATE: [PASS] This methodology favors companies that have several years of fast earnings growth, as these companies have a proven formula for growth that in many cases can continue many more years. This methodology likes to see earnings growth in the range of 20% to 50%, as earnings growth over 50% may be unsustainable. The EPS growth rate for PLUS is 23.4%, based on the average of the 3, 4 and 5 year historical eps growth rates, which is considered very good. TOTAL DEBT/EQUITY RATIO: [PASS] This methodology would consider the Debt/Equity ratio for PLUS (26.83%) to be acceptable (equity is three to ten times debt). This ratio is one quick way to determine the financial strength of the company. FREE CASH FLOW: [NEUTRAL] The Free Cash Flow/Price ratio, though not a requirement, is considered a bonus if it is above 35%. A positive Cash Flow (the higher the better) separates a wonderfully reliable investment from a shaky one. This methodology prefers not to invest in companies that rely heavily on capital spending. This ratio for PLUS (-3.55%) is too low to add to the attractiveness of the stock. Keep in mind, however, that it does not adversely affect the company as it is a bonus criteria. NET CASH POSITION: [NEUTRAL] Another bonus for a company is having a Net Cash/Price ratio above 30%. Lynch defines net cash as cash and marketable securities minus long term debt. According to this methodology, a high value for this ratio dramatically cuts down on the risk of the security. The Net Cash/Price ratio for PLUS (9.45%) is too low to add to the attractiveness of this company. Keep in mind, however, that it does not adversely affect the company as it is a bonus criteria.   TRUEBLUE INC Profile Strategy: Price/Sales Investor Based on: Kenneth Fisher TrueBlue, Inc., is a provider of temporary blue-collar staffing. The Company provides blue-collar staffing services to industries that include construction, manufacturing, transportation, aviation, waste, hospitality, retail, energy, and many more. The Company has a network of 757 branches in all 50 states, Puerto Rico and Canada. The Company operates as labor ready for general labor through Spartan Staffing for light industrial, CLP Resources for skilled trades, PlaneTechs for aviation and transportation mechanics and technicians, and Centerline Drivers for drivers. The Company's service lines include Providing blue-collar temporary labor services; serve customers who have a need for temporary staff to perform blue-collar tasks which do not require a permanent employee; build a temporary workforce through recruiting, screening and on-boarding. Temporary workers are dispatched to customers where they work under the supervision of its customers. Analysis Guru Score: 90% PRICE/SALES RATIO: [PASS] The prospective company should have a low Price/Sales ratio. Non-cyclical (non-Smokestack) companies with Price/Sales ratios below 0.75 are tremendous values and should be sought. TBI's P/S of 0.50 based on trailing 12 month sales, is below 0.75 which is considered quite attractive. It passes this methodology's P/S ratio test with flying colors. TOTAL DEBT/EQUITY RATIO: [PASS] Less debt equals less risk according to this methodology. TBI's Debt/Equity of 23.31% is acceptable, thus passing the test. PRICE/RESEARCH RATIO: [PASS] This methodology considers companies in the Technology and Medical sectors to be attractive if they have low Price/Research ratios. TBI is neither a Technology nor Medical company. Therefore the Price/Research ratio is not available and, hence, not much emphasis should be placed on this particular variable. PRELIMINARY GRADE: Some Interest in TBI At this Point Is TBI a "Super Stock"? NO PRICE/SALES RATIO: [PASS] The prospective company should have a low Price/Sales ratio. Non-cyclical(non-Smokestack) companies with Price/Sales ratios below .75 are tremendous values and should be sought.TBI's P/S ratio of 0.50 is below .75 which is considered extremely attractive. It passes this methodology's P/S ratio test with flying colors. LONG-TERM EPS GROWTH RATE: [PASS] This methodology looks for companies that have an inflation adjusted EPS growth rate greater than 15%. TBI's inflation adjusted EPS growth rate of 36.91% passes the test. FREE CASH PER SHARE: [PASS] This methodology looks for companies that have a positive free cash per share. Companies should have enough free cash available to sustain three years of losses. This is based on the premise that companies without cash will soon be out of business. TBI's free cash per share of 0.74 passes this criterion. THREE YEAR AVERAGE NET PROFIT MARGIN: [FAIL] This methodology looks for companies that have an average net profit margin of 5% or greater over a three year period. TBI, whose three year net profit margin averages 2.71%, fails this evaluation.   Watch List The Watch List contains the highest scoring stocks according to our guru consensus system that are not currently in the Hot List portfolio. We provide this list both for informational purposes and for investors who are not comfortable with a portfolio of ten stocks. Ticker Company Name Industry Guru Score PNFP PINNACLE FINANCIAL PARTNERS Regional Banks 60 VLO VALERO ENERGY CORPORATION Oil & Gas Operations 58 SSL SASOL LIMITED (ADR) Chemical Manufacturing 57 SIMO SILICON MOTION TECHNOLOGY CORP. (ADR) Semiconductors 54 PII POLARIS INDUSTRIES INC. Recreational Products 51 BMA BANCO MACRO SA (ADR) Money Center Banks 49 FOSL FOSSIL GROUP INC Jewelry & Silverware 49 LL LUMBER LIQUIDATORS HOLDINGS INC Retail (Home Improvement) 48 ITUB ITAU UNIBANCO HOLDING SA (ADR) Regional Banks 47 MNST MONSTER BEVERAGE CORP Beverages (Non-Alcoholic) 46

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