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Executive Summary	April 10, 2015

The Economy The economy is continuing to adjust to the plunge in oil prices, and, despite a disappointing March jobs report, the adjustment seems to be going well. The private sector added 129,000 jobs in March, the Labor Department said, with total nonfarm payrolls rising by 126,000. That was the weakest increase in 15 months. Overall, however, the job market seems solid. Average hourly wages increased 0.3% in March; after six years of sub-2% annual wage growth, wages jumped nearly 1% in the first quarter. The unemployment rate dipped slightly to 5.5% in March, while the broader "U-6" rate (which unlike the headline number takes into account those working part-time who want full-time work, and discouraged workers who have given up looking for a job) fell to 10.9%, the first time it came in under 11% since before Lehman Brothers collapsed in September 2008, triggering the financial crisis. New claims for unemployment have fallen since our last newsletter, and are 15.4% below year-ago levels. Continuing claims, the data for which lag new claims by a week, also moved lower since our last newsletter and are 16% below year-ago levels. And another Labor Department report showed that job openings jumped to their highest level in 14 years in February. Still, March's slowdown in job growth has led many economists to predict that the Federal Reserve is now unlikely to raise interest rates in June. A rate hike is more likely in September, many predict. Manufacturing growth continued to slow in March, meanwhile, though the sector still expanded for the 27th straight month, according to the Institute for Supply Management. New order growth also slowed but remained positive, while employment growth was flat. ISM's service sector index was more encouraging. It showed that the service sector expanded in March for the 62nd straight month, doing so at about the same strong pace that it did in January and February. New orders and employment growth both accelerated. Consumer data was also encouraging. Personal income rose 0.3% in February, according to the Commerce Department. Real disposable personal income was up 0.2%, while real personal consumption expenditures fell 0.1%. That helped push the personal savings rate up to a very healthy 5.8%, the highest in over two years. The slowing manufacturing growth and consumer data seems to be indicating that a.) certain areas of the economy are feeling the negative impact of the oil price plunge that began last summer, and b.) consumers have yet to start spending the money that they are saving at the pump. In terms of the former, a number of downward revisions in the energy sector have meant that Q1 earnings for S&P 500 companies are now expected to decline 4.6%, according to FactSet. In terms of the latter, it wouldn't be surprising to see consumers start spending elsewhere as they get used to saving money on gas. Since our last newsletter, the S&P 500 returned 1.7%, while the Hot List returned 3.7%. So far in 2015, the portfolio has returned 13.3% vs. 1.6% for the S&P. Since its inception in July 2003, the Hot List is far outpacing the index, having gained 266.5% vs. the S&P's 109.0% gain. The Case For Guru Strategies After a rough 2014, our guru-inspired strategies bounced back nicely in the first quarter. All our 10-stock, monthly rebalanced portfolios are ahead of the S&P 500 year-to-date, as of this writing. The Hot List has fared particularly well, already making up all of its 2014 losses. While I had no idea about the timing of our portfolios' bounce-backs, the fact that our strategies have rebounded is not a surprise. We've been using these strategies long enough to know that they are strategies that work over time -- if you stick with them. The principles behind the strategies our gurus developed -- buy shares of solid companies at good prices -- are timeless, we believe. So while these approaches won't work all the time (no strategy will), we're confident that they will work more often then they won't work, which over the long term makes for very strong returns. Not everyone has that kind of faith in long-term, guru-inspired strategies. Recently I read an article contending that the strategies of Benjamin Graham -- "the father of value investing" -- can't work in today's environment because times are so different from when Graham managed money. The reasoning sounds logical -- after all, there was no high-frequency trading back in Graham's day, markets were far, far less global, and the 401(k) and retirement account investing that drives a lot of today's equity purchases wasn't a factor. Then there is the notion that once a successful strategy is revealed and becomes widely known, its effectiveness wanes. And, finally, certain variables can go in and out of fashion as investors develop new techniques for evaluating businesses and stocks. All of that makes it seem that yesterday's winning strategies are doomed to fail today. Nonetheless, our experience and testing shows that successful strategies tend to continue to work long after they are revealed. In fact, Graham's Defensive Investor approach is the basis of one of our top-performing strategies, despite the fact that Graham published it 65 years ago. How can this be? I think there are a few key reasons. The first is that our Graham strategy (like our other strategies) uses a variety of fundamental criteria that look at a stock from multiple angles. The Graham model looks at valuation from three perspectives: the price/earnings ratio using trailing 12-month earnings per share; the P/E using three-year average EPS; and the price/book ratio. That helps ensure that a) a one-year anomaly in earnings doesn't make a stock look deceptively cheap, and that b) the strategy doesn't fail if the P/E or the P/B goes out of vogue for a while. (By combining a variety of strategies, we add further "variable diversification" to our consensus portfolios.) Secondly, good strategies don't work because of some numerical hocus-pocus. The variables they use are not magic bullets. We're not buying Graham-style stocks with stable earnings, more net current assets than long-term debt, and low P/E and P/B ratios because we think that, in a year or two, people will greatly value stocks with those qualities. (In fact, when we sell the shares, we hope the P/E and P/B ratios will be much higher.) We're buying them because those numbers tell us a story about a company and its shares. Each variable gives another piece of the puzzle, whether it be the information on a company's balance sheet, the effectiveness of its management, or the attractiveness of its share price. Sure, certain variables may go in and out of favor at certain times. But good strategies work because the variables they use get at the heart of good business and good investing. Might a metric have come along that is better than the Graham strategy's net current assets to long-term debt comparison? Yes, perhaps. But the goal of that variable is to give a good assessment of the company's balance sheet. While one could argue that there is now a better variable to do that, I find it extremely hard to argue that looking for firms with more net current assets than long-term debt will ever be a bad way to assess a company's financial health. Think about what that metric measures -- essentially, it tells you whether a company could liquidate its assets and use the profits and any other cash it has to pay off all of its debts, without going into the red. In what kind of financial world would that not be an attractive characteristic? As for the issue of strategies becoming less effective once they are known, that can be true. Good strategies succeed because they exploit some inefficiency in the market -- a blind spot that the investing world has -- allowing you to buy good stocks that were mispriced. Kenneth Fisher's development of the price/sales ratio is a great example of that. Up until he published Super Stocks in the mid-1980s, most investors were focused on price/earnings and price/book ratios when valuing a stock. But in his book, Fisher showed how sales were often a better indicator of a firm's business than either book value or earnings. Earnings, for example, can fluctuate greatly from year to year based on decisions to replace equipment or facilities in one year rather than in another, initiatives to put money into new research that will help the company reap profits later on, or changes in accounting methods. That can all turn one quarter's profits into the next quarter's losses, without regard for what Fisher thought was truly important in the long term -- how well or poorly the company's underlying business was performing. While a stock might look unattractive based on its earnings or P/E, its price/sales ratio might more accurately signal that it was a bargain. Theoretically, once that concept became well-known, it should have stopped working. The more investors who moved to exploit the inefficiency, the higher the prices of low-price/sales stocks would become, and the less lucrative their returns. But that assumes that humans are rational, and decades and decades of market history show that they are not. Most people, whether individual investors or professional fund managers, don't buy stocks based on cold, hard fundamentals and financials. Instead they follow the crowd, or trying to capitalize on macroeconomic factors, or base their decisions on their biased evaluations of a company's products and services. And if they try to follow a fundamental-based strategy, they often end up ditching it as soon as it hits short-term problems (which any strategy will do), as they can't take the emotional toll of staying the course when things aren't going well. Or, they alter the strategy by vetoing some of its picks that they find too anxiety provoking. In fact, Joel Greenblatt, another of the gurus we follow, found that over a two-year period investors who were able to pick and choose between stocks his quantitative strategy approved of (and pick the timing of their trades) fared far worse than those who had their buying and selling done on automated fixed intervals, with no ability to veto picks the formula recommended. While the latter beat the market by 21.4 percentage points, the former actually lagged the market by about 3 points. One big reason: They tended to miss out on many of the best performing stocks -- beaten-down value plays that were the subject of scary headlines. Successful, publicly disclosed strategies can continue to work over the long term if they incorporate a diverse set of variables that measure real and timeless concepts like profitability, debt levels, and valuation -- if, that is, you stick to them through the inevitable short-term ups and downs, as their creators no doubt intended. I believe this not because it sounds good or makes sense theoretically. I believe it instead because I have seen our guru-inspired strategies have great success over the past dozen years. Such strategies won't work on every pick and they won't work all the time. But neither will new, successful strategies -- I guarantee you that the most successful new stock-picking method of 2015 will stumble at some point. The key is to pick a strategy whose variables analyze important, fundamental business concepts -- profitability, debt levels, revenue growth -- and which buys at attractive prices stocks that rate highly in those areas. If you employ those types of strategies in an unemotional, systematic manner, you should continue to enjoy success long after the strategies are well-known.		Editor-in-Chief: John Reese Since Inception   Hot List 266.5% S&P 500 109.0% Accuracy 55.4% Beta 1.2 YTD   Hot List 13.3% S&P 500 1.6% Since Last Issue   Hot List 3.7% S&P 500 1.7% Avg. Fundamentals   Market Cap (mil) $78,836 PE Ratio 13.5 5 Yr EPS Growth 24.8% Yield 1.0% Rel. Strength 69 Portfolio Sectors Consumer/Non-Cyclical 2 Financial 2 Healthcare 1 Services 1 Technology 1 Basic Materials 1 Capital Goods 1 Consumer Cyclical 1
The Fallen As we rebalance the Validea Hot List, 2 stocks leave our portfolio. These include: Sodastream International Ltd (SODA) and Zumiez Inc. (ZUMZ). The Keepers 8 stocks remain in the portfolio. They are: Apple Inc. (AAPL), Sasol Limited (Adr) (SSL), 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 2 stocks to the portfolio. These include: Pilgrim's Pride Corporation (PPC) and Fossil Group Inc (FOSL). Portfolio Changes Additions   PILGRIM'S PRIDE CORPORATION PPC FOSSIL GROUP INC FOSL Deletions   Sodastream International Ltd SODA ZUMIEZ INC. ZUMZ Newcomers to the Validea Hot List Pilgrim's Pride Corporation (PPC): Greeley, Colo.-based Pilgrim's works with approximately 4,000 family farms throughout the U.S. and Mexico, and is the second-largest chicken producer in the world. It has operations in 12 U.S. states as well as in Mexico and Puerto Rico. The $6-billion-market-cap firm has taken in more than $8.5 billion in sales over the past year. Pilgrim's gets high marks from my Kenneth Fisher- and Joel Greenblatt-inspired models. To read more about it, scroll down to the "Detailed Stock Analysis" section. Fossil, Inc. (FOSL): Texas-based Fossil makes a variety of watches, handbags, clothing, and other accessories. The $4.3-billion-market-cap firm has taken in $3.5 billion in sales over the past 12 months. Fossil gets strong interest from both my Warren Buffett- and Peter Lynch-based models. For more on the stock, see the "Detailed Stock Analysis" section below. News about Validea Hot List Stocks Zumiez (ZUMZ): Zumiez reported a 5.5% increase in March comparable store sales, but shares dropped because the increase wasn't as strong as analysts had predicted. Analysts on average expected comparable store sales growth of 6.4%, TheStreet.com reported. Overall, Zumiez said sales were up 11% in March, to $70.7 million. 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 GTLS CHART INDUSTRIES, INC. Misc. Capital Goods 85 SAFM SANDERSON FARMS, INC. Food Processing 76 LCI LANNETT COMPANY, INC. Biotechnology & Drugs 69 CACC CREDIT ACCEPTANCE CORP. Consumer Financial Services 66 AAPL APPLE INC. Communications Equipment 64 JLL JONES LANG LASALLE INC Real Estate Operations 62 PPC PILGRIM'S PRIDE CORPORATION Food Processing 60 FOSL FOSSIL GROUP INC Jewelry & Silverware 52 SSL SASOL LIMITED (ADR) Chemical Manufacturing 50 Ticker Market Cap Date Added Start Price Current Price Return UVE $940 3/13/2015 $24.58 $26.61 8.3% GTLS $1,223 3/13/2015 $33.50 $40.06 19.6% SAFM $1,825 1/16/2015 $80.96 $78.76 -2.7% LCI $2,479 2/13/2015 $57.78 $69.23 19.8% CACC $4,109 3/13/2015 $188.06 $199.51 6.1% AAPL $737,180 2/13/2015 $127.08 $126.56 -0.4% JLL $7,520 2/13/2015 $161.15 $167.72 4.1% PPC $6,106 4/10/2015 TBD $23.51 TBD FOSL $4,280 4/10/2015 TBD $84.96 TBD SSL $22,696 12/19/2014 $38.95 $35.31 -9.3%

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   |   GTLS   |   SAFM   |   LCI   |   CACC   |   AAPL   |   JLL   |   PPC   |   FOSL   |   SSL   |   UNIVERSAL INSURANCE HOLDINGS, INC. Profile Strategy: Small-Cap Growth Investor Based on: Motley Fool 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: 100% 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. UVE's profit margin of 19.76% 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. UVE, with a relative strength of 95, 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 UVE (37.21% for EPS, and 34.67% for Sales) are good enough to pass. INSIDER HOLDINGS: [PASS] UVE's insiders should own at least 10% (they own 10.94% ) 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. UVE's free cash flow of $2.70 per share passes this test. PROFIT MARGIN CONSISTENCY: [PASS] UVE's profit margin has been consistent or even increasing over the past three years (Current year: 19.77%, Last year: 19.58%, Two years ago: 11.23%), passing the requirement. It is a sign of good management and a healthy and competitive enterprise. R&D AS A PERCENTAGE OF SALES: [NEUTRAL] This criterion is not critically important for companies that are not high-tech or medical stocks because they are not as R&D dependant as companies within those sectors. Not much emphasis should be placed on this test in UVE's case. CASH AND CASH EQUIVALENTS: [PASS] UVE's level of cash $115.4 million passes this criteria. If a company is a cash generator, like UVE, it has the ability to pay off debt (if it has any) or acquire other companies. Most importantly, good operations generate cash. "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 (UVE's is 0.36), the shares are looked upon favorably. These high quality companies can often wind up as the biggest winners. UVE passes this test. The following criteria for UVE are less important which means you would place less emphasis on them when making your investment decision using this strategy: AVERAGE SHARES OUTSTANDING: [PASS] UVE has not been significantly increasing the number of shares outstanding within recent years which is a good sign. UVE currently has 35.0 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. UVE's sales of $369.3 million based on trailing 12 month sales, are fine, making this company one such "prospective gem". UVE passes the sales test. DAILY DOLLAR VOLUME: [PASS] UVE passes the Daily Dollar Volume (DDV of $9.9 million) test. It is required that this number be less than $25 million because these are the stocks that remain relatively undiscovered by institutions. "You'll be scoring touchdowns against the big guys on your turf." 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. UVE with a price of $26.61 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] UVE's income tax paid expressed as a percentage of pretax income this year was (42.81%) and last year (41.35%) 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.   CHART INDUSTRIES, INC. Profile Strategy: Growth Investor Based on: Martin Zweig 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: 77% 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. GTLS's P/E is 15.11, 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. GTLS's revenue growth is 16.75%, while it's earnings growth rate is 22.31%, based on the average of the 3, 4 and 5 year historical eps growth rates. Therefore, GTLS 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 (7.3%) must be examined, and then compared to the previous quarter last year compared to the previous quarter (-2.6%) of the current year. Sales growth for the prior must be greater than the latter. For GTLS 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. GTLS's EPS ($0.88) pass this test. QUARTERLY EARNINGS ONE YEAR AGO: [PASS] The EPS for the quarter one year ago must be positive. GTLS's EPS for this quarter last year ($0.70) 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. GTLS's growth rate of 25.71% passes this test. EARNINGS GROWTH RATE FOR THE PAST SEVERAL QUARTERS: [FAIL] 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 GTLS is 11.16%. This should be less than the growth rates for the 3 previous quarters which are -25.49%, 1.56% and 0.00%. GTLS does not pass this test, which means that it does not have 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, -6.35%, (versus the same three quarters a year earlier) is less than the growth rate of the current quarter earnings, 25.71%, (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, 25.71% must be greater than or equal to the historical growth which is 22.31%. GTLS 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. GTLS, whose annual EPS growth before extraordinary items for the previous 5 years (from the earliest to the most recent fiscal year) were 0.69, 1.47, 2.36, 2.60 and 2.67, 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. GTLS's long-term growth rate of 22.31%, based on the average of the 3, 4 and 5 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. GTLS's Debt/Equity (23.75%) is not considered high relative to its industry (80.28%) 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 GTLS, this criterion has not been met (insider sell transactions are 148, while insiders buying number 45). 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.   SANDERSON FARMS, INC. Profile Strategy: Price/Sales Investor Based on: Kenneth Fisher 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: 100% 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. SAFM's P/S of 0.64 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. SAFM's Debt/Equity of 2.08% 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. SAFM 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 SAFM At this Point Is SAFM a "Super Stock"? YES 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.SAFM's P/S ratio of 0.64 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%. SAFM's inflation adjusted EPS growth rate of 16.60% 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. SAFM's free cash per share of 4.65 passes this criterion. THREE YEAR AVERAGE NET PROFIT MARGIN: [PASS] This methodology looks for companies that have an average net profit margin of 5% or greater over a three year period. SAFM, whose three year net profit margin averages 5.37%, passes this evaluation.   LANNETT COMPANY, INC. Profile Strategy: P/E/Growth Investor Based on: Peter Lynch 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: 93% DETERMINE THE CLASSIFICATION: This methodology would consider LCI a "fast-grower". P/E/GROWTH RATIO: [PASS] The investor should examine the P/E (20.27) relative to the growth rate (47.15%), based on the average of the 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 LCI (0.43) 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. LCI, whose sales are $368.8 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. 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 LCI was 21.54% last year, while for this year it is 16.38%. Since inventory to sales has decreased from last year by -5.16%, LCI passes this test. 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 LCI is 47.2%, based on the average of the 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: [PASS] This methodology would consider the Debt/Equity ratio for LCI (0.28%) to be exceptionally low (equity is at least 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 LCI (0.78%) 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 LCI (5.67%) 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.   CREDIT ACCEPTANCE CORP. Profile Strategy: P/E/Growth Investor Based on: Peter Lynch 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: 91% DETERMINE THE CLASSIFICATION: This methodology would consider CACC a "fast-grower". P/E/GROWTH RATIO: [PASS] The investor should examine the P/E (16.58) relative to the growth rate (20.05%), 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 CACC (0.83) makes it 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. CACC, whose sales are $723.5 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 CACC is 20.0%, 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] CACC 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. CACC'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. CACC's ROA (10.20%) 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 CACC (8.10%) 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 CACC (-41.68%) 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.   APPLE INC. Profile Strategy: Growth/Value Investor Based on: James P. O'Shaughnessy Apple Inc. designs, manufactures and markets mobile communication and media devices, personal computers and portable digital music players and sells a variety of related software, services, peripherals, networking solutions and third-party digital content and applications. The Company's products and services include iPhone, iPad, Mac, iPod, Apple TV, a portfolio of consumer and professional software applications, the iOS and OS X operating systems, iCloud and a variety of accessory, service and support offerings. The Company offers a range of mobile communication and media devices, personal computing products and portable digital music players, as well as a variety of related software, services, peripherals, networking solutions and third-party hardware and software products. The Company's primary products include iPhone, iPad, Mac, iPod, iTunes, Mac App Store, iCloud, Operating System Software, Application Software and Other Application Software. Analysis Guru Score: 80% MARKET CAP: [PASS] The Cornerstone Value Strategy looks for large, well known companies whose market cap is greater than $1 billion. These companies exhibit solid and stable earnings. AAPL's market cap of $737,180 million passes this test. CASH FLOW PER SHARE: [PASS] The second criterion requires that the company exhibit strong cash flows. Companies with strong cash flow are typically the value oriented investments that this strategy looks for. The company's cash flow per share must be greater than the mean of the market cash flow per share ($1.75). AAPL's cash flow per share of $9.07 passes this test. SHARES OUTSTANDING: [PASS] This particular strategy looks for companies whose total number of outstanding shares are in excess of the market average (629 million shares). These are the more well known and highly traded companies. AAPL, who has 5,882 million shares outstanding, passes this test. TRAILING 12 MONTH SALES: [PASS] A company's trailing 12 month sales ($199,800 million) are required to be 1.5 times greater than the mean of the market's trailing 12 month sales ($21,575 million). AAPL passes this test. DIVIDEND: [FAIL] The final step in the Cornerstone Value strategy is to select the 50 companies from the market leaders group (those that have passed the previous four criteria) that have the highest dividend yield. AAPL's dividend yield of 1.48% fails this final criterion. Even though it did pass the previous four criteria it would fail the overall methodology.   JONES LANG LASALLE INC Profile Strategy: Price/Sales Investor Based on: Kenneth Fisher 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: 90% PRICE/SALES RATIO: [PASS] The prospective company should have a low Price/Sales ratio. Non-cyclical (non-Smokestack) companies with Price/Sales ratio between .75 and 1.5 are good values. JLL's P/S ratio of 1.38 based on trailing 12 month sales, falls within the "good values" range for non-cyclical companies and is considered attractive. TOTAL DEBT/EQUITY RATIO: [PASS] Less debt equals less risk according to this methodology. JLL's Debt/Equity of 12.34% 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. JLL 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 JLL At this Point Is JLL a "Super Stock"? NO PRICE/SALES RATIO: [FAIL] The prospective company should have a low Price/Sales ratio. To be considered a "Super Stock", non-cyclical (non-Smokestack) companies should have Price/Sales ratios below .75. However, JLL, who has a P/S of 1.38, does not fall within the "Super Stock" range. It does fall between 0.75 and 1.5, which is considered the "good values" range for non-cyclical companies. Nonetheless, it does not pass this "Super Stock" criterion. LONG-TERM EPS GROWTH RATE: [PASS] This methodology looks for companies that have an inflation adjusted EPS growth rate greater than 15%. JLL's inflation adjusted EPS growth rate of 26.07% 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. JLL's free cash per share of 10.54 passes this criterion. THREE YEAR AVERAGE NET PROFIT MARGIN: [PASS] This methodology looks for companies that have an average net profit margin of 5% or greater over a three year period. JLL, whose three year net profit margin averages 6.15%, passes this evaluation.   PILGRIM'S PRIDE CORPORATION Profile Strategy: Price/Sales Investor Based on: Kenneth Fisher Pilgrim's Pride Corp (Pilgrim's) is a chicken producer with operations in the United States, Mexico and Puerto Rico. The Company is engaged in the production, processing, marketing and distribution of fresh, frozen and value-added chicken products to retailers, distributors and foodservice operators. As of December 26, 2010, it had the capacity to process more than 38 million birds per week for a total of more than 10.3 billion pounds of live chicken annually. During the fiscal year ended December 26, 2010 (fiscal 2010), it produced 7.7 billion pounds of chicken products. As of December 26, 2010, it operated 26 poultry processing plants located in Alabama, Arkansas, Florida, Georgia, Kentucky, Louisiana, North Carolina, South Carolina, Tennessee, Texas, Virginia, and West Virginia. It has one chicken processing plant in Puerto Rico and three chicken processing plants in Mexico. In August 2012, Cal-Maine Foods, Inc. announced acquisition of the commercial egg assets of Pilgrim's. Analysis Guru Score: 100% 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. PPC's P/S of 0.71 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. PPC's Debt/Equity of 0.19% 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. PPC 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 PPC At this Point Is PPC a "Super Stock"? YES 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.PPC's P/S ratio of 0.71 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%. PPC's inflation adjusted EPS growth rate of 55.12% 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. PPC's free cash per share of 3.45 passes this criterion. THREE YEAR AVERAGE NET PROFIT MARGIN: [PASS] This methodology looks for companies that have an average net profit margin of 5% or greater over a three year period. PPC, whose three year net profit margin averages 5.66%, passes this evaluation.   FOSSIL GROUP INC Profile Strategy: Growth/Value Investor Based on: James P. O'Shaughnessy Fossil Group, Inc. a global designer, marketer and distributer company that specializes in consumer fashion accessories. The Company's offerings include a line of men's and women's fashion watches and jewelry, handbags, small leather goods, belts, sunglasses, soft accessories and clothing. Its products are distributed globally through various distribution channels, including wholesale in countries where the Company has a physical presence, direct to the consumer through its retail stores and commercial websites and through third-party distributors in countries where the Company do not maintain a physical presence. The Company operates in four different segments: the North America Wholesale segment, the Europe Wholesale segment, Asia Pacific Wholesale segment and the Direct to Consumer segment. Analysis Guru Score: 75% MARKET CAP: [PASS] The first requirement of the Cornerstone Growth Strategy is that the company has a market capitalization of at least $150 million. This will screen out the companies that are too illiquid for most investors, but still include a small growth company. FOSL, with a market cap of $4,280 million, passes this criterion. EARNINGS PER SHARE PERSISTENCE: [PASS] The Cornerstone Growth methodology looks for companies that show persistent earnings growth without regard to magnitude. To fulfill this requirement, a company's earnings must increase each year for a five year period. FOSL, whose annual EPS before extraordinary items for the last 5 years (from earliest to the most recent fiscal year) were 3.77, 4.61, 5.59, 6.56 and 7.10, passes this test. PRICE/SALES RATIO: [PASS] The Price/Sales ratio should be below 1.5. This value criterion, coupled with the growth criterion, identify growth stocks that are still cheap to buy. FOSL's Price/Sales ratio of 1.22, based on trailing 12 month sales, passes this criterion. RELATIVE STRENGTH: [FAIL] The final criterion for the Cornerstone Growth Strategy requires that the Relative Strength of the company be among the top 50 of the stocks screened using the previous criterion. This gives you the opportunity to buy the growth stocks you are searching for just as the market is embracing them. FOSL has a relative strength of 38. This does not pass the final criterion. As a result, this methodology would not consider the stock even though it passed the previous three criteria.   SASOL LIMITED (ADR) Profile Strategy: Value Investor Based on: Benjamin Graham Sasol Limited (Sasol) is a South Africa-based international integrated energy and chemicals company. The Company develops and commercializes technologies, builds and operates facilities to produce a range of product streams, including liquid fuels, high-value chemicals and low-carbon electricity. The Company's operations are organized into three focused business clusters: South African Energy Cluster; International Energy Cluster and Chemical Cluster. The South African Energy Cluster is involved in coal mining, gas production, synfuels manufacturing and oil refining. The International Energy Cluster manages the Company's oil and gas business outside South Africa. The Chemical Cluster is involved in making polymers, solvents, olefins and surfactants and other chemicals. Analysis Guru Score: 100% SECTOR: [PASS] SSL 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. SSL's sales of $17,099.4 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. SSL's current ratio of 2.85 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 SSL is $2,712.2 million, while the net current assets are $5,528.3 million. SSL 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. SSL's EPS growth over that period of 215.4% 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. SSL's P/E of 10.10 (using the 3 year 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. SSL's Price/Book ratio is 1.48, while the P/E is 10.10. SSL passes the Price/Book test.   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 BMA BANCO MACRO SA (ADR) Money Center Banks 58 AFSI AMTRUST FINANCIAL SERVICES INC Insurance (Prop. & Casualty) 58 ITUB ITAU UNIBANCO HOLDING SA (ADR) Regional Banks 53 MNST MONSTER BEVERAGE CORP Beverages (Non-Alcoholic) 53 PII POLARIS INDUSTRIES INC. Recreational Products 50 UIHC UNITED INSURANCE HOLDINGS CORP.(NDA) Insurance (Prop. & Casualty) 50 AGCO AGCO CORPORATION Constr. & Agric. Machinery 48 NSM NATIONSTAR MORTGAGE HOLDINGS INC Consumer Financial Services 47 AGO ASSURED GUARANTY LTD. Insurance (Prop. & Casualty) 46 EW EDWARDS LIFESCIENCES CORP Medical Equipment & Supplies 46

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