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Executive Summary	April 11, 2014

The Economy The U.S. economy is continuing to rebound from its winter slowdown, with good news coming in from the manufacturing, service, and employment arenas. The private sector added 192,000 jobs in March, according to a new Labor Department report, and February's jobs-added number was revised upward by 26,000. The headline unemployment rate remained steady at 6.7%, while the broader "U-6" rate, which also includes part-time workers who want full-time work and discouraged workers who have given up looking for a job, rose just slightly by 0.1 percentage point, to 12.7%. The number of people not in the workforce declined by 331,000. More encouraging signs on the jobs front: The Labor Department said job openings rose in February to their highest level since January 2008, and new claims for unemployment fell last week to their lowest level since May 2007. Continuing claims hit their lowest level since January 2008. Good news also came from the manufacturing sector. The Institute for Supply Management's manufacturing index rose slightly in March, signaling that the sector expanded for the 10th straight month. The new orders sub-index also increased, the second straight month it has done so following a big drop in January. The production sub-index, which had fallen sharply in February, rebounded sharply in March to very healthy levels, another sign that weather may have been behind some of the weaker economic data we saw in early 2014. The service sector, meanwhile, expanded for the 50th straight month in March, and it did so at an accelerating rate, according to ISM. The new orders sub-index also rose, and the employment sub-index, which had fallen sharply in February, rebounded strongly. ISM's survey did indicate a pretty significant uptick in prices. Manufacturing prices have been at an elevated level for the past few months, and with service sector prices rising, inflation may be something to keep an eye on. New data also showed that personal income increased 0.3% in February, as did real disposable personal income. Real personal consumption expenditures rose 0.2%, which meant that the personal savings rate ticked upward by a percentage point, to 4.3%. That makes the second straight month that personal income and disposable personal income have made strong gains. The housing market has continued to level off. The National Association of Realtors' Pending Home Sales Index fell slightly in February, according to a new report. That put pending home sales down a little more than 10% versus a year ago levels. Some have cited weather as a reason for the housing market's stalling momentum. Prices continue to rise, though, with the latest S&P/Case-Shiller Home Price Indices data showing that prices rose on average by 0.8% across 20 U.S. cities in January. Compared to a year earlier, prices were up more than 13%. All in all, it has been an up-and-down fortnight for the market, particularly among smaller stocks and growth stocks. Since our last newsletter, the S&P 500 returned -0.9%, while the Hot List returned 0.2%. So far in 2014, the portfolio has returned -12.3% vs. -0.8% for the S&P. Since its inception in July 2003, the Hot List is far outpacing the index, having gained 219.1% vs. the S&P's 83.2% gain. Stalled Momentum So far in 2014, the Hot List has been experiencing some major volatility, and over the past month or so most of that volatility has been on the downside. Investors have been ditching higher-growth, higher-momentum stocks at a pretty rapid clip -- in the past month, large growth, medium growth, and small growth are the bottom three on Morningstar's style box category returns, returning -5.1%, -6.0%, and -7.9%, respectively (as of April 9). Of the eight different types of stocks Morningstar tracks, aggressive growth and speculative growth are far and away the worst two performers over the last month, returning -5.1% and -9.8%, respectively. Prior to that, these types of high-growth, high-momentum stocks had been surging. It appears that things got a bit frothy, at least in the minds of many investors, and thus we've seen a fairly steep pullback. While my Guru Strategies collectively have a distinct value bias, some of the best performers over the long haul incorporate momentum metrics as well. My Motley Fool-based strategy and my James O'Shaughnessy-based growth model, for example, both look at 12-month relative strength -- that is, how a stock has performed compared to all other stocks in the market over the past year. As you may know, while all of my individual guru models contribute to the Hot List, the models with the best historical performance are weighted more heavily in assembling the portfolio. Both the Fool- and O'Shaughnessy-based models have been very good long-term performers, and thus make a strong contribution to the Hot List's holdings, which means that a number of the stocks in the portfolio usually have strong momentum. As of April 9, the portfolio had an average 12-month relative strength of 74, meaning that on average its holdings had beaten 74% of other stocks in the market over the past year. Of course, I've often talked about the dangers of chasing hot stocks. That's why models like the Fool strategy and the O'Shaughnessy growth strategy employ a lot more than just momentum metrics. In fact both use very strong value criteria as well. The Fool model looks for stocks that have P/E-to-growth ratios less than 0.5 -- a very strict target. (My Peter Lynch-based model uses a target of 1.0, by comparison.) The O'Shaughnessy model, meanwhile, looks for stocks with price/sales ratios below 1.5. These models are thus looking for high-momentum stocks that are still cheap -- the best of both worlds. (In fact, O'Shaughnessy's research shows that throughout history, the combination of growth and momentum has been extremely successful.) The mix of momentum and value in the Hot List is thus one reason that the portfolio has fared so well over the long haul. But at times when momentum stocks are getting hit hard, as they have been lately, investors can sometimes punish inexpensive, fundamentally sound high-momentum plays along with the speculative momentum stocks that likely to deserve to be taken down a notch. That seems to be what has happened lately. While the high-momentum stocks in the Hot List like Caesarstone, Lannett, and BofI certainly haven't been dirt cheap, the premiums they've been trading at have appeared to be well worth it given their growth. As of our last rebalancing, for example, BofI traded at a P/E-to-growth ratio just below 1.0 and Caesarstone's was around 0.5. Lannett's was quite high, around 5.6, but that's a bit skewed in light of the fact that its earnings are expected to quadruple in the current fiscal year, which ends June 30. Several of the Hot List's new additions on today's rebalancing also have had strong momentum behind them; five of the seven newcomers have relative strengths above 70, with two at 80 or above. Should high-momentum stocks continue to get hit hard, that could of course mean more short-term underperformance for the portfolio. Of course, absolutely anything can happen in the short term, so we are certainly not going to alter our approach based on the recent momentum stock troubles. If anything, the fact that momentum stocks have gotten hit hard has made them -- particularly the fundamentally sound high-momentum stocks that the Hot List targets -- more attractive from a long-term perspective. Take Dorman Products, which has a 12-month relative strength of 80 and is up about 15% since mid-January. Yes, it has good momentum, but it also has stellar fundamentals and financials -- no long-term debt, a 4.7 current ratio, 22% return on equity, 17.8% return on retained earnings over the past decade, and 0.89 PEG. In other words, this isn't a speculative, ride-the-wave stock; it's a strong company with good long-term prospects and reasonable valuation given its stellar growth history. High-momentum stocks with those types of characteristics may get lumped in with more speculative, momentum-driven shares for short periods of time. But history shows that over the long term, these fundamentally sound stocks should deliver very good results. That's what we've seen with the Hot List and our individual momentum/value models over the years, and I expect that will continue to be the case over the long term.		Editor-in-Chief: John Reese Since Inception   Hot List 219.1% S&P 500 83.2% Accuracy 56.0% Beta 1.2 YTD   Hot List -12.3% S&P 500 -0.8% Since Last Issue   Hot List 0.2% S&P 500 -0.9% Avg. Fundamentals   Market Cap (mil) $12,870 PE Ratio 15.3 5 Yr EPS Growth 28.3% Yield 1.3% Rel. Strength 68 Portfolio Sectors Consumer Cyclical 3 Energy 3 Services 2 Capital Goods 1 Financial 1
Have Your Portfolio Managed Using Validea's Investing System Many users know about our research services but are unaware that money management services based on our system are also offered through a separate registered investment advisory firm, Validea Capital Management. If you are thinking about switching advisors or no longer have the time or inclination to manage your investments yourself, find out more about Validea Capital, its portfolio offerings, and its performance below. Request an Investment Consultation Today! ** Validea Capital Management is a separate investment advisory firm managed by Validea.com founder John Reese. The information above is not intended as personal investment advice and should not be interpreted as such. The Fallen As we rebalance the Validea Hot List, 7 stocks leave our portfolio. These include: Lannett Company, Inc. (LCI), Coach, Inc. (COH), Drew Industries, Inc. (DW), Parexel International Corporation (PRXL), Caesarstone Sdot-yam Ltd (CSTE), Netease, Inc (Adr) (NTES) and Usana Health Sciences, Inc. (USNA). The Keepers 3 stocks remain in the portfolio. They are: Agco Corporation (AGCO), Bofi Holding, Inc. (BOFI) and Hyster-yale Materials Handling Inc (HY). The Newbies We are adding 7 stocks to the portfolio. These include: Valero Energy Corporation (VLO), Cnooc Ltd (Adr) (CEO), Foot Locker, Inc. (FL), Smith & Wesson Holding Corp (SWHC), Dorman Products Inc. (DORM), Trueblue Inc (TBI) and Hollyfrontier Corp (HFC). Portfolio Changes Additions   VALERO ENERGY CORPORATION VLO CNOOC LTD (ADR) CEO FOOT LOCKER, INC. FL SMITH & WESSON HOLDING CORP SWHC DORMAN PRODUCTS INC. DORM TRUEBLUE INC TBI HOLLYFRONTIER CORP HFC Deletions   LANNETT COMPANY, INC. LCI COACH, INC. COH DREW INDUSTRIES, INC. DW PAREXEL INTERNATIONAL CORPORATION PRXL Caesarstone Sdot-Yam Ltd CSTE NETEASE, INC (ADR) NTES USANA HEALTH SCIENCES, INC. USNA Newcomers to the Validea Hot List HollyFrontier Corp. (HFC): Formed when Holly Corp. merged with Frontier Oil in 2011, Dallas-based HollyFrontier ($10 billion market cap) is one of the U.S.'s largest independent petroleum refiners. It has operations in the Midwest, Southwestern, and Rocky Mountain regions, operating five complex refineries. HollyFrontier gets strong interest from my Benjamin Graham-based strategy and high marks from my Peter Lynch- and Kenneth Fisher-based models. To read more about its fundamentals, scroll down to the "Detailed Stock Analysis" section below. Valero Energy Corporation (VLO): This San Antonio-based oil refiner has taken in $138 billion in sales in the past year. It has 16 petroleum refineries, 10 ethanol plants, and a 50-megawatt wind farm among its assets. Valero ($28 billion market cap) gets strong interest from my Peter Lynch- and James O'Shaughnessy-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 $1.7 billion in sales over the past 12 months. TrueBlue ($1.2 billion market cap) gets strong interest from my Peter Lynch- and James O'Shaughnessy-based models. To read more about its fundamentals, check out the "Detailed Stock Analysis" section below. CNOOC Limited (CEO): This $73-billion-market-cap oil and natural gas operations giant (the Chinese National Offshore Oil Corporation) has taken in more than $40 billion in sales over the past 12 months. It gets strong interest from a trio of my models, those I base on the writings of David Dreman, Peter Lynch, and James O'Shaughnessy. To read more about its fundamentals, check out the "Detailed Stock Analysis" section below. Dorman Products (DORM): This Pennsylvania-based firm ($2.1 billion market cap) sells auto replacement parts and fasteners and products for the automotive aftermarket. Dorman gets strong interest from my Peter Lynch- and Martin Zweig-based models, as well as my Momentum Investor approach. To read more about the stock, scroll down to the "Detailed Stock Analysis" section below. Foot Locker (FL): This specialty athletic retailer operates nearly 3,500 stores in 23 countries in North America, Europe, Australia, and New Zealand, offering athletic footwear and apparel. Foot Locker ($6.7 billion market cap) gets strong interest from my James O'Shaughnessy-based model. To read more about its fundamentals, check out the "Detailed Stock Analysis" section below. Smith & Wesson Holding (SWHC): This Massachusetts-based company ($800 million market cap) makes firearms and firearm related products, including handguns, modern sporting rifles, hunting rifles, black powder firearms, and handcuffs. Its customers include collectors, hunters, competitive shooters, individuals desiring home and personal protection, law enforcement and security agencies and officers, and military agencies. Smith & Wesson gets strong interest from my Peter Lynch- and Joel Greenblatt-based models. For more on its fundamentals, see the "Detailed Stock Analysis" section below. News about Validea Hot List Stocks USANA Health Sciences (USNA): USANA shares were up about 7% since our last newsletter as of mid-afternoon trading on April 10. The bounce may have been related to Barclays maintaining its outperform rating on Herbalife, whose similar business model has led the two stocks to often trade on each other's news. Some deterioration in USANA's fundamentals is leading the Hot List to sell the stock as part of today's rebalancing. The stock had a great run for the portfolio, gaining 135% since joining the Hot List last Dec. 21 (through April 9). 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 VLO VALERO ENERGY CORPORATION Oil & Gas Operations 96 SWHC SMITH & WESSON HOLDING CORP Recreational Products 89 TBI TRUEBLUE INC Business Services 81 HY HYSTER-YALE MATERIALS HANDLING INC Auto & Truck Manufacturers 80 DORM DORMAN PRODUCTS INC. Auto & Truck Parts 77 CEO CNOOC LTD (ADR) Oil & Gas Operations 75 FL FOOT LOCKER, INC. Retail (Apparel) 72 HFC HOLLYFRONTIER CORP Oil & Gas Operations 70 BOFI BOFI HOLDING, INC. Regional Banks 54 AGCO AGCO CORPORATION Constr. & Agric. Machinery 49 Ticker Market Cap Date Added Start Price Current Price Return VLO $27,663 4/11/2014 TBD $51.93 TBD SWHC $778 4/11/2014 TBD $14.16 TBD TBI $1,139 4/11/2014 TBD $27.66 TBD HY $1,253 3/14/2014 $100.75 $97.65 -3.1% DORM $2,081 4/11/2014 TBD $56.98 TBD CEO $73,568 4/11/2014 TBD $164.81 TBD FL $6,516 4/11/2014 TBD $44.74 TBD HFC $9,429 4/11/2014 TBD $47.39 TBD BOFI $1,051 1/17/2014 $80.22 $74.44 -7.2% AGCO $5,221 12/20/2013 $57.62 $55.60 -3.5%

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 VLO   |   SWHC   |   TBI   |   HY   |   DORM   |   CEO   |   FL   |   HFC   |   BOFI   |   AGCO   |   VALERO ENERGY CORPORATION Profile Strategy: Growth/Value Investor Based on: James P. O'Shaughnessy Valero Energy Corporation (Valero) is an independent petroleum refining and marketing company. Valero's refineries can produce conventional gasoline's, distillates, jet fuel, asphalt, petrochemicals, lubricants, and other refined products, as well as a slate of premium products, including conventional blendstock for oxygenate blending and reformulated gasoline blendstock for oxygenate blending, gasoline meeting the specifications of the California Air Resources Board, a diesel fuel, and low-sulfur and ultra-low-sulfur diesel fuel. It also owns 10 ethanol plants in the central plains region of the United States with a combined ethanol nameplate production capacity of about 1.1 billion gallons per year. It operates in three business segments: refining, ethanol, and retail. In May 2013, CST Brands Inc announced that the Company which includes Corner Store and Depanneur du Coin, spun off from Valero Energy Corporation. Analysis Guru Score: 100% 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. VLO, with a market cap of $27,663 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. VLO, whose annual EPS before extraordinary items for the last 5 years (from earliest to the most recent fiscal year) were -0.51, 1.62, 3.68, 3.74 and 4.96, 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. VLO's Price/Sales ratio of 0.20, based on trailing 12 month sales, passes this criterion. RELATIVE STRENGTH: [PASS] 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. VLO, whose relative strength is 71, is in the top 50 and would pass this last criterion.   SMITH & WESSON HOLDING CORP Profile Strategy: P/E/Growth Investor Based on: Peter Lynch Smith & Wesson Holding Corporation (Smith & Wesson) is a manufacturer of firearms. The Company manufactures a range of handguns, modern sporting rifles, hunting rifles, black powder firearms, handcuffs, and firearm-related products and accessories for sale to a range of customers, including gun enthusiasts, collectors, hunters, sportsmen, competitive shooters, individuals desiring home and personal protection, law enforcement and security agencies and officers, and military agencies in the United States and globally. It sells its products under the Smith & Wesson brand, the M&P brand, the Thompson/Center Arms brand, and the Performance Center brand. The Company manufactures its firearm products at its facilities in Springfield, Massachusetts and Houlton, Maine. Analysis Guru Score: 93% DETERMINE THE CLASSIFICATION: This methodology would consider SWHC a "fast-grower". P/E/GROWTH RATIO: [PASS] The investor should examine the P/E (9.32) relative to the growth rate (44.56%), based on the average of the 3 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 SWHC (0.21) 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. SWHC, whose sales are $634.9 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 SWHC was 13.42% last year, while for this year it is 10.72%. Since inventory to sales has decreased from last year by -2.70%, SWHC 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 SWHC is 44.6%, based on the average of the 3 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 SWHC (72.54%) to be mediocre. If the Debt/Equity ratio is this high, the other ratios and financial statistics for SWHC should be good enough to compensate. 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 SWHC (6.00%) 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 SWHC (-0.35%) 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: Growth Investor Based on: Martin Zweig TrueBlue, Inc. (TrueBlue) is a provider of temporary blue-collar staffing services. The Company has a network of 691 branches in all 50 states, Puerto Rico and Canada, which supply its customers with temporary workers. It operates as Labor Ready for general labor, Spartan Staffing for light industrial services, CLP Resources for skilled trades, PlaneTechs for aviation and diesel mechanics and technicians, and Centerline Drivers for dedicated and temporary drivers to the transportation and distribution industries. In June 2013, Trueblue Inc acquired the assets of Crowley Transportation Services. On September 30, 2013, the Company acquired The Work Connection (TWC). 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. TBI's P/E is 24.96, based on trailing 12 month earnings, while the current market PE is 16.00. 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. TBI's revenue growth is 13.12%, while it's earnings growth rate is 43.61%, based on the average of the 3 and 4 year historical eps growth rates. Therefore, TBI 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 (30.3%) must be examined, and then compared to the previous quarter last year compared to the previous quarter (18.9%) of the current year. Sales growth for the prior must be greater than the latter. For TBI 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. TBI's EPS ($0.36) pass this test. QUARTERLY EARNINGS ONE YEAR AGO: [PASS] The EPS for the quarter one year ago must be positive. TBI's EPS for this quarter last year ($0.19) 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. TBI's growth rate of 89.47% 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 TBI is 21.81%. This should be less than the growth rates for the 3 previous quarters which are -175.00%, 19.23% and 30.56%. TBI 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, 13.64%, (versus the same three quarters a year earlier) is less than the growth rate of the current quarter earnings, 89.47%, (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, 89.47% must be greater than or equal to the historical growth which is 43.61%. TBI 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. TBI, whose annual EPS growth before extraordinary items for the previous 5 years (from the earliest to the most recent fiscal year) were 0.20, 0.46, 0.73, 0.84 and 1.11, 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. TBI's long-term growth rate of 43.61%, 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. TBI's Debt/Equity (7.54%) is not considered high relative to its industry (124.54%) 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 TBI, this criterion has not been met (insider sell transactions are 215, while insiders buying number 34). 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.   HYSTER-YALE MATERIALS HANDLING INC Profile Strategy: P/E/Growth Investor Based on: Peter Lynch Hyster-Yale Materials Handling, Inc. (Hyster-Yale), formerly NMHG Holding Co., , designs, engineers, manufactures, sells and services a line of lift trucks and aftermarket parts. The Company's products are marketed globally under the Hyster and Yale brand names. The Company segments include three management units: Americas, Europe and Asia-Pacific. Americas includes its operations in the United States, Canada, Mexico, Brazil and Latin America. Europe includes its operations in Europe, the Middle East and Africa. Asia-Pacific includes its operations in the Asia-Pacific region and China. Lift trucks and component parts are manufactured in the United States, Northern Ireland, Mexico, The Netherlands, the Philippines, Italy, Japan, Vietnam, Brazil and China. Hyster-Yale has a 20% ownership interest in Hyster-Yale Financial Services, Inc. (NFS). Hyster-Yale is a wholly owned subsidiary of NACCO Industries, Inc. (NACCO). Analysis Guru Score: 91% DETERMINE THE CLASSIFICATION: This methodology would consider HY a "fast-grower". P/E/GROWTH RATIO: [PASS] The investor should examine the P/E (14.92) relative to the growth rate (21.96%), based on the average of the 3 and 4 year historical eps growth rates using the current fiscal year eps estimate, 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 HY (0.68) 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. HY, whose sales are $2,666.3 million, needs to have a P/E below 40 to pass this criterion. HY's P/E of (14.92) 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 HY was 12.50% last year, while for this year it is 12.40%. Since inventory to sales has not changed appreciably, HY 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 HY is 22.0%, based on the average of the 3 and 4 year historical eps growth rates using the current fiscal year eps estimate, which is considered very good. TOTAL DEBT/EQUITY RATIO: [PASS] This methodology would consider the Debt/Equity ratio for HY (15.45%) 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 HY (6.07%) 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 HY (10.18%) 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.   DORMAN PRODUCTS INC. Profile Strategy: Value Investor Based on: Benjamin Graham Dorman Products, Inc. (Dorman) is a supplier of automotive and heavy duty truck replacement parts and service line products primarily for the automotive aftermarket. The Company market approximately 133,000 different stock keeping units (SKU's) of automotive replacement parts (including brake parts), fasteners and service line products. Original equipment dealer parts are those parts, which were available to consumers only from original equipment manufacturers or salvage yards. These parts include, among other parts, intake manifolds, exhaust manifolds, oil cooler lines, window reguRobotors, radiator fan assemblies, power steering pulleys, harmonic balancers, tire pressure monitor sensors and keyless entry devices. Fasteners include such items as oil drain plugs, wheel bolts, and wheel lug nuts. Analysis Guru Score: 71% SECTOR: [PASS] DORM 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. DORM's sales of $664.5 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. DORM's current ratio of 4.71 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 DORM is $0.0 million, while the net current assets are $340.7 million. DORM 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. DORM's EPS growth over that period of 334.1% passes the EPS growth test. P/E RATIO: [FAIL] 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. DORM's P/E of 25.41 (using the current PE) fails 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. DORM's Price/Book ratio is 5.02, while the P/E is 25.41. DORM fails the Price/Book test.   CNOOC LTD (ADR) Profile Strategy: P/E/Growth Investor Based on: Peter Lynch CNOOC Limited is an investment holding company. The Company, along with its subsidiaries, is a producer of offshore crude oil and natural gas and an independent oil and gas exploration and production company. Its subsidiaries are engaged in exploration, development, production and sales of oil and natural gas. It has three segments: independent operations, operations under joint arrangement and trading business. The Company has four producing areas in offshore China, which include the Bohai Bay, Western South China Sea, Eastern South China Sea and East China Sea. It also has oil and gas assets in Indonesia, Iraq, Australia, Africa, North America and South America. As of December 31, 2012, its subsidiaries included CNOOC China Limited, CNOOC International Limited, China Offshore Oil (Singapore) International Pte Ltd and others. Analysis Guru Score: 93% DETERMINE THE CLASSIFICATION: CEO is considered a "True Stalwart", according to this methodology, as its earnings growth of 16.99% lies within a moderate 10%-19% range and its annual sales of $43,202 million are greater than the multi billion dollar level. This methodology looks for the "Stalwart" securities to gain 30%-50% in value over a two year period if they can be purchased at an attractive price based on the P/E to Growth ratio. CEO is attractive if CEO can hold its own during a recession. 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 CEO was 1.82% last year, while for this year it is 2.12%. 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 (0.30%) is below 5%. YIELD ADJUSTED P/E TO GROWTH (PEG) RATIO: [PASS] The Yield-adjusted P/E/G ratio for CEO (0.32), based on the average of the 3, 4 and 5 year historical eps growth rates, is excellent. EARNINGS PER SHARE: [PASS] The EPS for a stalwart company must be positive. CEO's EPS ($23.79) would satisfy this criterion. TOTAL DEBT/EQUITY RATIO: [PASS] This methodology would consider the Debt/Equity ratio for CEO (39.47%) to be normal (equity is approximately twice debt). 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 CEO (4.93%) 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 CEO (-13.65%) 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.   FOOT LOCKER, INC. Profile Strategy: Price/Sales Investor Based on: Kenneth Fisher Foot Locker, Inc. is a global retailer of shoes and apparel, operating 3,335 primarily mall-based stores in the United States, Canada, Europe, Australia, and New Zealand as of February 2, 2013. The Company operates in two segments: Athletic Stores and Direct-to-Customers. The Athletic Stores segment is an athletic footwear and apparel retailer whose formats include Foot Locker, Lady Foot Locker, Kids Foot Locker, Champs Sports, Footaction, and CCS. The Direct-to-Customers segment includes Footlocker.com, Inc. and other affiliates, including Eastbay, Inc. and CCS, which sell to customers through Internet websites, mobile devices, and catalogs. In September 2013, the Company acquired Runners Point Warenhandels GmbH (Runners) from Hannover Finanz GmbH. 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. FL's P/S ratio of 1.00 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. FL's Debt/Equity of 5.57% 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. FL 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 FL At this Point Is FL 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, FL, who has a P/S of 1.00, 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%. FL's inflation adjusted EPS growth rate of 54.33% 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. FL's free cash per share of 1.37 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. FL, whose three year net profit margin averages 5.98%, passes this evaluation.   HOLLYFRONTIER CORP Profile Strategy: P/E/Growth Investor Based on: Peter Lynch HollyFrontier Corporation (HollyFrontier), formerly Holly Corporation, is a petroleum refiner, which produces light products, such as gasoline, diesel fuel, jet fuel, specialty lubricant products, and specialty and modified asphalt. HollyFrontier operates in two segments: Refining and Holly Energy Partners, L.P. (HEP). The Refining segment includes the operations of its El Dorado, Tulsa, Navajo, Cheyenne and Woods Cross Refineries and NK Asphalt. The HEP segment involves all of the operations of HEP. As of December 31, 2011, it operated five refineries having a combined crude oil processing capacity of 443,000 barrels per day that serve markets throughout the Mid-Continent, Southwest and Rocky Mountain regions of the United States. The Company merged with Frontier Oil Corporation (Frontier), on July 1, 2011. On November 9, 2011, HEP acquired from the Company certain tankage, loading rack and crude receiving assets located at its El Dorado and Cheyenne Refineries. Analysis Guru Score: 74% DETERMINE THE CLASSIFICATION: This methodology would consider HFC a "fast-grower". P/E/GROWTH RATIO: [PASS] The investor should examine the P/E (13.10) relative to the growth rate (104.10%), 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 HFC (0.13) is very 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. HFC, whose sales are $20,160.6 million, needs to have a P/E below 40 to pass this criterion. HFC's P/E of (13.10) 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 HFC was 6.57% last year, while for this year it is 6.72%. 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 (0.15%) is below 5%. EPS GROWTH RATE: [FAIL] 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 HFC is 104.1%, based on the average of the 3, 4 and 5 year historical eps growth rates, which is considered too fast. TOTAL DEBT/EQUITY RATIO: [PASS] This methodology would consider the Debt/Equity ratio for HFC (16.63%) 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 HFC (-2.11%) 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 HFC (7.05%) 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.   BOFI HOLDING, INC. Profile Strategy: P/E/Growth Investor Based on: Peter Lynch BofI Holding, Inc. is a holding company for BofI Federal Bank, a diversified financial services company. The Bank operate its bank from a single location in San Diego, California, serving approximately 40,000 retail deposit and loan customers across all 50 states. As of June 30, 2012, it had total assets of $2,386.8 million, loans of $1,799.7 million, mortgage-backed and other investment securities of $483.0 million, total deposits of $1,615.1 million and borrowings of $547.2 million. It distributes its deposit products through a range of retail distributions channels, and its deposits consist of demand, savings and time deposits accounts. It distributes its loan products through its retail, correspondent and wholesale channels, and the loans it retains are primarily first mortgages secured by single family real property and by multifamily real property. Analysis Guru Score: 91% DETERMINE THE CLASSIFICATION: This methodology would consider BOFI a "fast-grower". P/E/GROWTH RATIO: [PASS] The investor should examine the P/E (22.65) relative to the growth rate (30.90%), 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 BOFI (0.73) 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. BOFI, whose sales are $148.7 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 BOFI is 30.9%, based on the average of the 3, 4 and 5 year historical eps growth rates, which is acceptable. TOTAL DEBT/EQUITY RATIO: [NEUTRAL] BOFI 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. BOFI's Equity/Assets ratio (9.00%) is 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. BOFI's ROA (1.46%) 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 BOFI (1.03%) 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 BOFI (18.83%) 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.   AGCO CORPORATION Profile Strategy: Price/Sales Investor Based on: Kenneth Fisher AGCO Corporation (AGCO) is a manufacturer and distributor of agricultural equipment and related replacement parts globally. The Company sells a range of agricultural equipment, including tractors, combines, self-propelled sprayers, hay tools, forage equipment and implements. It also manufactures and distributes grain storage and handling equipment systems, as well as protein production systems. Its products are recognized in the agricultural equipment industry and are marketed under a range of brands, including Challenger, Fendt, Massey Ferguson and Valtra. The Company distributes its products through a combination of approximately 3,100 independent dealers and distributors in more than 140 countries. In September 2013, Grain Systems, Inc. (GSI), a global brand of the Company announced that it has purchased Johnson System Inc. (JSI), manufacturer of catwalks, towers and support structures based in Marshall, Michigan. Analysis Guru Score: 100% PRICE/SALES RATIO: [PASS] The prospective company should have a low Price/Sales ratio. Smokestack (cyclical) companies with a Price/Sales ratio between .4 and .8 represent good values according to this methodology. AGCOpasses this test as its P/S of 0.48 based on trailing 12 month sales, falls within the "good values" range for cyclical companies. TOTAL DEBT/EQUITY RATIO: [PASS] Less debt equals less risk according to this methodology. AGCO's Debt/Equity of 31.18% 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. AGCO 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 AGCO At this Point Is AGCO a "Super Stock"? YES PRICE/SALES RATIO: [PASS] The prospective company should have a low Price/Sales ratio. Non-Smokestack(non-cyclical) companies with a Price/Sales ratio between .75 and 1.5 are good values. Otherwise, Smokestack(cyclical) companies with a Price/Sales ratio between .4 and .8 represent good values. AGCO's P/S ratio of 0.48 falls within the "good values " range for cyclical industries and is considered attractive. LONG-TERM EPS GROWTH RATE: [PASS] This methodology looks for companies that have an inflation adjusted EPS growth rate greater than 15%. AGCO's inflation adjusted EPS growth rate of 27.41% 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. AGCO's free cash per share of 3.68 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. AGCO, whose three year net profit margin averages 5.81%, passes 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 BBBY BED BATH & BEYOND INC. Retail (Specialty) 82 ROST ROSS STORES, INC. Retail (Apparel) 70 NTES NETEASE, INC (ADR) Business Services 69 DW DREW INDUSTRIES, INC. Mobile Homes & RVs 68 TECD TECH DATA CORP Retail (Technology) 67 TLK PERUSAHN PRSN PSR TLKMKS INDS TBK PT-ADR Communications Services 67 COH COACH, INC. Retail (Apparel) 66 WRLD WORLD ACCEPTANCE CORP. Consumer Financial Services 65 UVE UNIVERSAL INSURANCE HOLDINGS, INC. Insurance (Prop. & Casualty) 65 CBI CHICAGO BRIDGE & IRON COMPANY N.V. Construction Services 62

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