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Ascendere Associates LLC Innovative Long/Short Equity Research

Model Portfolio Daily Update: January 27, 2011


This daily update is a supplement to a monthly report dated December 31, 2010 that details the model portfolio strategies of Ascendere Associates LLC ("Ascendere"). For more
information, please see our list of frequently asked questions, suggested tips on using our newsletter or an interview with us on Covestor Live. See also our long-only model
based on actual trade data. Please see our disclosures and disclaimers at the back of this report.

New Actions Required:


A short position in Tidewater Inc. (TDW) closed above its stop price of $57.58 and will be assumed closed at the end of trading tomorrow. A short position in ProLogis (PLD)
closed above its stop price of $15.63 and will be assumed closed at the end of trading tomorrow.

As we have noted before, over the last few months it has been a better for hedged strategies to short index futures instead of individual stocks, because many relatively
unattractive stocks (fundamental speaking) are increasingly surprising to the upside as the economic backdrop improves against already depressed valuations and fundamentals.

Of Note:.
The 25 stocks in our long models have in total for the month to date experienced at least 45 major positive upgrades from the sell side upgrades that we are aware of. Today,
our models experienced four positive revisions: TRW Automotive (TRW) was upgraded to Buy from Neutral by Goldman Sachs, which also raised its price target to $77 from
$60, based on valuation, above average growth, and low expectations according to TheFlyOnTheWall.com. RPC, Inc. (RES) was upgraded to Buy from Hold by Gabelli. East West
Bancorp (EWBC) had its price target raised to $26 from $22 by Cantor Fitzgerald. United Continental Holdings (UAL) was upgraded to Buy from Hold at Dahlman Rose.

By consistently buying and holding stocks that demonstrate historical and likely ongoing improvements in returns on capital that are trading a decent relative value, investors
are maximizing their chances of being "surprised" to the upside and are equipping themselves to better ignore the incessant noise that comprises financial news stories and
seemingly random price action. UAL is a recent good example of this, having declined nearly 14% last month and risen by almost as much this month. Nothing significant has
changed with its relative standings in our rankings. Through today at least, it remains a fundamentally solid improving company with relative value.

Ascendere Associates LLC January 27, 2011


J. Stephen Castellano Page 1 steve@ascenderellc.com
www.ascenderellc.com
Avnet Inc. (AVT) reported solid quarterly results after the close today, beating in all key metrics. Revenue guidance for its next fiscal quarter ended March 2011 is now $5.95-
6.55b versus current consensus of $6.198b and EPS guidance is $0.93-1.01 versus consensus of $0.94. As of today, it seems like AVT will remain a highly ranked stock in the
Technology sector.
Avnet Inc. 500 499 498 497 496
AVT 2000 1999 1998 1997 1996
Information Technology
Technology Distributors
500

12/31/2010 # Estimates Forecast Actual Variance LTM Margin


Revenue 11 $ 6,685 $ 6,767 $ 83
High $ 6,862 $ (95)
Low $ 6,593 $ 174

EBITDA 7 $ 274 $ 275 $ 1 4.1%


High $ 288 $ (12)
Low $ 262 $ 13

EBIT 9 $ 252 $ 257 $ 5 3.8%


High $ 266 $ (9)
Low $ 244 $ 13

EPS quarter 13 $ 1.03 $ 1.07 $ 0.04


High $ 1.08 $ (0.01)
Low $ 1.00 $ 0.07

Shares Outsanding 152 152 -

Avnet Inc. Estimate Estimate Estimate Estimate Estimate


NYSE:AVT 4/30/12 1/31/12 10/31/11 7/31/11 4/30/11 1/1/11 10/2/10 7/3/10 4/3/10 1/2/10
NOPLAT 917 904 893 882 852 791 699 579 310 168
Economic Charge 474 479 490 494 488 477 403 326 380 365
Economic Profit 443 425 404 388 365 313 295 253 (71) (197)
Sequential growth 4% 5% 4% 6% 16% 6% 17% -458% -64% -87%

NOPLAT 917 904 893 882 852 791 699 579 310 168
Operating Capital 5,209 5,270 5,384 5,428 5,362 5,245 4,946 3,670 3,747 3,602
ROIC (NOPLAT / Operating Capital)
17.2% 16.9% 16.9% 17.9% 18.6% 18.6% 18.0% 16.3% 8.7% 4.7%
Sequential growth 2% 0% -5% -4% 0% 3% 11% 87% 86% -116%

# EBIT Forecasts 6 6 7 7 7

EBIAT Trailing 12 months 703 693 683 668 646 603 536 457 385 318
Depreciation 76 75 75 77 73 69 66 61 61 62
Capital Spending, recurring (132) (131) (137) (134) (126) (113) (89) (67) (64) (85)
Working Capital Investment 209 31 (332) (1,351) (1,262) (1,317) (1,266) (392) (115) 403
Free cash flow to the entity 856 667 289 (740) (669) (757) (753) 58 267 697

Source: Capital IQ data and estimates, Ascendere Associates data and estimates.

Ascendere Associates LLC January 27, 2011


J. Stephen Castellano Page 2 steve@ascenderellc.com
www.ascenderellc.com
There are limitations inherent in our backtested theoretical model results, particularly
with the fact that such results do not represent actual trading and they may not
reflect the impact material economic and market factors might have had on our
decision making if we were actually managing client money. Please see additional
disclaimers and disclosures at the back of this report.

Ascendere Associates LLC January 27, 2011


J. Stephen Castellano Page 3 steve@ascenderellc.com
www.ascenderellc.com
Actions Taken for January to Date:

1/26/2011: Harley-Davidson Inc. (HOG) was assumed closed at $39.36 after closing above its stop price of $37.43 the prior trading day for a 13.53% loss.

1/18/2011: Lear Corp. (LEA) was assumed closed at $109.30 after closing above its price target of $108.53 the previous trading day for a 10.73% return.

1/18/2011: TRW Automotive Holdings Corp. (TRW) was assumed closed at $60.68 after closing above its price target of $60.20 the previous trading day for a 15.14% return.

1/11/2011: Packaging Corp. of America (PKG) was assumed closed at $28.07 after closing above its stop price of $27.55 the previous day for an 8.63% loss.

12/31/2010: Model portfolios were rebalanced following the 12/30/2010 close.

Ascendere Associates LLC January 27, 2011


J. Stephen Castellano Page 4 steve@ascenderellc.com
www.ascenderellc.com
Nostradamus Activity -- Core and Opportunistic Model Portfolios:
We have noted on numerous occasions that it is not uncommon for stocks that appear in our model portfolios or our weekly ranking updates to presage major ratings actions by
sell side firms. See our "Nostradamus Report" and "Getting in Before Sell Side Institutions Follow" for more details. Below is a non-comprehensive list of sell side actions on
stocks that have been in our model portfolios since at least 12/31/2010:

1/27/2011 -- TRW Automotive (TRW) -- Goldman Sachs upgraded to Buy from Neutral and its price target was also raised to $77 from $60, based on valuation, above average
growth, and low expectations .

1/27/2011 -- RPC, Inc. (RES) -- Gabelli upgraded the stock to Buy from Hold.

1/27/2011 -- East West Bancorp (EWBC) -- Cantor Fitzgerald increased its price target on the stock to $26 from $22.

1/27/2011 -- United Continental Holdings (UAL) -- was upgraded to Buy from Hold at Dahlman Rose.

1/26/2011 -- East West Bancorp Inc. (EWBC) -- Credit Suisse raised its price target to $22 from $20, RBC raised its price target to $23 from $20, Sandler O'Neil raised its target to
$23 from $20 and Citigroup raised it to $22 from $20.

1/26/2011 -- United Continental Holdings, Inc. (UAL) -- Morgan Stanley lists the stock as a long Research Tactical idea.

1/25/2011 -- Lam Research Corp. (LRCX) --UBS raises LRCX price target to $60 from $59, and raises targets for AMAT, KLAC, NLVS, VSEA and TER as well.

1/25/2011 -- LyondellBasell Industrives NV (LYB) -- UBS initiates with a Buy rating and $42 price target.

1/25/2011 -- Huntsman Corporation (HUH) -- UBS initiates the stock with a Buy rating and $21 price target.

1/24/2011 -- Waddell & Reed Financial, Inc. (WDR) -- Bank of America/Merrill Lynch upgraded the stock to Buy from Neutral and its price target was raised to $44 from $35.
According to TheFlyOnTheWall.com, "the firm believes the company's operating leverage is accelerating and that it should benefit from a rotation into equities."

1/21/2011 -- Parker-Hannifin Corp (PH) -- Citigroup raises target to $100 from $94, citing recent sell off as a buying opportunity.

1/20/2011 -- Macy's, Inc. (M) -- Credit Suisse names the stock its top pick for 2011 after previously upgrading on 1/11.

1/20/2011 -- TRW Automotive Holdings Corp. (TRW) -- Soleil raised its price target to $71 from $59 "to reflect higher build assumptions and new business wins."

1/19/2011 -- Avnet Inc. (AVT) -- UBS raises price target to $42 from $40.

1/19/2011 -- Waddell & Reed Financial, Inc. (WDR) -- Stifel Nicolaus raises rating to Buy from Hold

1/18/2011 -- Avnet Inc. (AVT) -- Longbow upgrades to Buy from Neutral with a $41 price target.

Ascendere Associates LLC January 27, 2011


J. Stephen Castellano Page 5 steve@ascenderellc.com
www.ascenderellc.com
1/14/2011 -- Lam Research Corp. (LRCX) --Deutsche Bank upgrades to Buy from Hold.

1/14/2011 -- Freeport McMoRan Copper & Gold (FCX) -- Dahlman Rose raises price target to $160 from $125.

1/14/2011 -- Lam Research Corp. (LRCX) -- Bank of America/Merrill Lynch raises price target to $50 from $40.

1/13/2011 -- Parker Hannifin Corp (PH) -- JP Morgan upgrades the stock to Overweight from Neutral.

1/13/2011 -- Huntsman (HUN) -- Jefferies raises price target to $21 from $18 maintaining Buy rating.

1/13/2011 -- Albemarle Corp. (ALB) -- Jefferies raises price target to $75 from $61 and maintains Buy rating.

1/12/2011 --Albemarle Corp. (ALB) -- named a long Tactical Research Idea by Morgan Stanley.

1/12/2011 -- Lear Corp. (LEA) -- Credit Suisse raises Lear target price to $142 from $133 and maintains Outperform rating.

1/12/2011 -- PNC Financial Services Group Inc (PNC) --Wells Fargo upgrades bank sector to Overweight from Neutral and names PNC Financial one of five bank stocks (BAC,
JPM, GS, CMA, PNC) as a top idea for 2011.

1/11/2011 -- Waddell & Reed Financial, Inc. (WDR) -- Barclays raises price target to $43 from $41.

1/11/2011 -- T. Rowe Price Group, Inc. (TROW) -- Barclays raises price target to $71 from $69.

1/11/2011 -- Macy's, Inc. (M) -- Credit Suisse upgrades to Outperform from Neutral and raised its price target to $27 from $25. The analyst expects shareholders to benefit from
the ongoing pay down of debt.

1/10/2011 -- Freeport McMoRan Copper & Gold (FCX) -- Stifel Nicolaus upgraded the stock to Buy from Hold based on expected leverage to rising commodity prices.

1/10/2011 -- United Continental (UAL) -- Soleil raised estimates and its price target for UAL to $35 from $33.

1/10/2011 -- LyondellBasell (LYB) -- BWS Financial raised its price target for LYB to $40 from $35. Also, FMR Corp. reported a 10.18% passive stake in the company.

1/10/2011 -- Lam Research (LRCX) -- Morgan Stanley added the name as a long Research Tactical Idea.

1/10/2011 -- Lear Corp. (LEA) -- Barclays upgraded the stock to Overweight from Equal weight, and increased its stock price target to $123 from $94.

Ascendere Associates LLC January 27, 2011


J. Stephen Castellano Page 6 steve@ascenderellc.com
www.ascenderellc.com
1/10/2011 -- Westlake Chemical Corp. (WLK) -- Goldman Sachs upgrades stock to Neutral from Sell and removes from its Americas Sell List. According to Reuters, Goldman
upgraded raised a number of ratings and price targets in the chemical industry given the group's "improved outlook, higher growth prospects and attractive valuation" and that
the group "...should see another year of outperformance primarily driven by continued estimate increases."

1/10/2011 -- Parker-Hannifin Corporation (PH) -- Goldman Sachs upgrades stock to Buy from Neutral and raises stock price target to $105 from $92.

1/10/2011 -- Dover Corporation (DOV) -- Goldman Sachs increased its price target to $72 from $65, removed the stock from the Conviction Buy List and kept it rated Buy.

1/7/2011 -- T. Rowe Price Group, Inc. (TROW) -- Deutsche Bank raises price target to $65 from $58.

1/7/2011 -- East West Bancorp Inc. (EWBC) -- Goldman Sachs initiated with a Buy rating and $24.50 price target.

1/7/2011 -- Freeport McMoRan Copper & Gold Inc. (FCX) -- Canaccord upgrades to Buy from Hold, raising target to $135 from $98.

1/6/2011 -- PNC Financial Services Group Inc (PNC) -- UBS names the stock a short-term Buy.

1/6/2011 -- PNC Financial Services Group Inc (PNC) -- Nomura initiated coverage of the stock with a Buy rating and $73 target.

Ascendere Associates LLC January 27, 2011


J. Stephen Castellano Page 7 steve@ascenderellc.com
www.ascenderellc.com
Model Portfolio Strategies* 01/27/11 WTD MTD YTD Cumulative Sharpe
Simple Returns (No Compounding)

Fundamentals Only Naïve Model


No Risk Mgmt Long "High-Quality" 0.93% 2.37% 2.27% 2.27% 78.3% 0.42
Short "Low-Quality" 0.37% 2.37% 2.73% 2.73% 6.4% (0.04)
Dollar Neutral 0.56% 0.00% -0.46% -0.46% 71.9% 0.55

Stock Targets Core Model


Long 0.45% 2.95% 2.71% 2.71% 168.7% 0.81
Short 0.81% 4.08% 4.62% 4.62% -51.5% (0.41)
Dollar Neutral -0.36% -1.13% -1.90% -1.90% 220.2% 1.47

Stock Targets and Opportunistic Model


Portfolio Targets Long 0.45% 2.95% 2.71% 2.71% 220.6% 1.47
Short 0.81% 4.08% 4.62% 4.62% -56.1% (0.57)
Opportunistic Long/Short -0.36% -1.13% -1.90% -1.90% 276.7% 2.02

Stock Targets and Opportunistic Model II


Portfolio Targets Long Stocks 0.45% 2.95% 2.71% 2.71% 220.6% 1.47
Short S&P 500 Futures 0.22% 1.26% 3.30% 3.30% -17.8% (0.32)
Opportunistic Long/Short II 0.22% 1.70% -0.59% -0.59% 238.4% 2.08

S&P 500 Index, ex dividends 0.22% 1.26% 3.30% 3.30% 23.09% 0.07

* This table represents a theoretical model, and is presented for informational purposes only. This table is not representative of any actual portfolio and is not to be construed as any advertisement of any investment
service. The figures above are gross returns of various models and do not assume any kind of cost. Real portfolios that attempt to exactly replicate these theoretical strategies are guaranteed to generate relatively
lower returns.

"Naive" Model. So named because it excludes risk management and other refinements and is intended to show the returns due to fundamental factors alone, which include operating momentum, relative value,
fundamental quality and analyst revision momentum. Typically the Naive Model comprises of approximately 80-100 stocks.

Core Model. A refined version of the Naive Model and uses stock-specific price targets and stops. Over the backtest, the number of stocks in the Core Model has comprised on average approximately 22 stocks in the
long portfolio and 15 stocks in the short portfolio.

Opportunistic Model. Uses the same stocks and stock-specific price targets and stops of the Core Model, but it additionally applies target and stop loss rules to the long and short portfolios. This model is usually
dollar neutral, but when target or stops are reached this model could change to 100% long or short or to 100% cash at any given time.

Return of Stocks in the Long Portfolio - Return of Stocks in the Short Portfolio = Return of Overall Portfolio. Cumulative and YTD returns are based in part on backtested returns and returns collected in real time.
Cumulative returns include a backtest to 12/31/2004. Returns of the Naive Model have been tracked in real time since December 31, 2009. Returns of the Core Model has been tracked in real time since July 31, 2010.
Returns of the Opportunistic Model have been tracked in real time since August 31, 2010. Cumulative returns and the Sharpe Ratios are calculated from the 12/31/2004 "inception." The risk free rate used in the
calculation is the 90-day T-bill, which has averaged ~2.29% since 12/31/2004. The returns above do not include estimated expenses.

Ascendere Associates LLC January 27, 2011


J. Stephen Castellano Page 8 steve@ascenderellc.com
www.ascenderellc.com
Opportunistic Long Only Theoretical Model versus Model Based on Real Trade Data
No Leverage Theoretical Model, Excluding Costs -- From "Inception": 217.97%
Excludes Dividends Since "Inception", Simple Returns 180%
Since "Inception", Compound Returns 412%
Estimated costs include slippage, transaction fees and management fees of 0.56% per month.
Description 27-Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 12/31/11 2011
Theoretical Model w/ Estimated Costs 2.15% 2.15%
Real portfolio, ex mgmt fees* 2.60% 2.60%
S&P 500 ex Div 3.30% 3.30%
S&P 500 with Div
Description Jan-10 Feb-10 Mar-10 Apr-10 May-10 Jun-10 Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 12/31/10 2010
Theoretical Model w/ Estimated Costs -4.40% 5.28% 7.40% 8.03% -0.56% -6.95% 7.19% -7.23% 7.59% 6.70% 3.30% 4.64% 31.00%
Real portfolio, ex mgmt fees* 1.69% 7.26% 2.66% 5.28%
S&P 500 ex Div -3.67% 2.93% 5.74% 1.56% -8.15% -5.26% 6.82% -4.72% 8.51% 3.67% -0.14% 6.37% 13.66%
S&P 500 with Div
Description Jan-09 Feb-09 Mar-09 Apr-09 May-09 Jun-09 Jul-09 Aug-09 Sep-09 Oct-09 Nov-09 Dec-09 2009
Theoretical Model w/ Estimated Costs 10.06% -10.05% 6.54% 7.66% 8.16% -2.69% 10.98% 7.13% 9.06% 6.66% 7.60% 4.23% 65.34%
S&P 500 ex Div -8.35% -11.14% 9.20% 9.35% 5.49% 0.19% 7.34% 3.41% 3.60% -1.80% 5.68% 1.78% 24.75%
S&P 500 with Div 26.46%
Description Jan-08 Feb-08 Mar-08 Apr-08 May-08 Jun-08 Jul-08 Aug-08 Sep-08 Oct-08 Nov-08 Dec-08 2008
Theoretical Model w/ Estimated Costs -13.51% 0.75% -4.10% 4.80% 5.19% -8.04% 7.81% -0.72% -14.33% -0.56% 7.76% 7.40% -7.55%
S&P 500 ex Div -6.07% -3.37% -0.28% 4.79% 1.14% -8.81% -0.77% 1.38% -8.30% -15.69% -5.96% 0.78% -41.17%
S&P 500 with Div -37.00%
Description Jan-07 Feb-07 Mar-07 Apr-07 May-07 Jun-07 Jul-07 Aug-07 Sep-07 Oct-07 Nov-07 Dec-07 2007
Theoretical Model w/ Estimated Costs 4.28% 6.63% -0.90% 7.20% 7.43% 1.15% 6.91% 0.02% 4.80% 6.31% -3.46% 2.54% 42.91%
S&P 500 ex Div 1.42% -2.13% 1.07% 4.27% 3.24% -1.72% -3.13% 1.54% 3.61% 1.56% -4.22% -0.86% 4.63%
S&P 500 with Div 5.49%
Description Jan-06 Feb-06 Mar-06 Apr-06 May-06 Jun-06 Jul-06 Aug-06 Sep-06 Oct-06 Nov-06 Dec-06 2006
Theoretical Model w/ Estimated Costs 6.61% -4.10% 7.17% 7.52% 6.62% 6.92% -2.66% -1.88% -4.44% 7.73% 5.66% 0.29% 35.45%
S&P 500 ex Div 2.56% 0.08% 1.13% 1.24% -3.07% 0.11% 0.58% 2.13% 2.42% 3.13% 1.66% 1.26% 13.23%
S&P 500 with Div 15.79%
Description Jan-05 Feb-05 Mar-05 Apr-05 May-05 Jun-05 Jul-05 Aug-05 Sep-05 Oct-05 Nov-05 Dec-05 2005
Theoretical Model w/ Estimated Costs -0.62% 5.29% -6.29% -6.44% 4.73% 1.06% 7.03% 0.05% 3.09% -5.73% 6.50% 1.83% 10.50%
S&P 500 ex Div -2.52% 1.91% -1.89% -1.94% 2.99% 0.01% 3.57% -1.09% 0.73% -1.70% 3.49% -0.09% 3.46%
S&P 500 with Div 4.91%
* These theoretical returns can change at any time as we refine our backtests. "Real portfolio" returns are not audited.
Opportunistic Model returns recorded in real-time since July 31, 2010.

Ascendere Associates LLC January 27, 2011


J. Stephen Castellano Page 9 steve@ascenderellc.com
www.ascenderellc.com
January 27, 2011

Best performing "high-quality" stocks: Worst performing "high-quality" stocks:


Tractor Supply Company TSCO +9.19% LAM Research Corp. LRCX -4.18%
Magna International, Inc. MGA +5.08% Tyco Electronics, Ltd. TEL -2.65%
TRW Automotive Holdings Corp. TRW +4.73% Freeport-McMoRan Copper & Gold Inc.FCX -2.41%

Best performing "low-quality" stocks: Worst performing "low-quality" stocks:


Genpact Ltd. G -2.44% ProLogis PLD +7.96%
Regency Energy Partners LP RGNC -2.27% Inverness Medical Innovations Inc. IMA +2.44%
Pride International Inc. PDE -1.44% Harley-Davidson Inc. HOG +2.34%

Most of the time, our models assume investors are long "high-quality" stocks and short "low-quality" stocks. Therefore, we would prefer to see "high-quality"
stocks moving up for the day and "low-quality" stocks moving down.

Ascendere Associates LLC January 27, 2011


J. Stephen Castellano Page 10 steve@ascenderellc.com
www.ascenderellc.com
Daily Returns
The latest daily returns, and backtested daily returns, of all stocks and model portfolio strategies are available to paying subscribers on request.

The stock picking methodology among our Core and Opportunistic Models are the same.

Our Opportunistic Model differs from our Core Model in that it incorporates portfolio-based risk-management strategies, which are continually under
refinement.

Our portfolio targets and stops are available to paying subscribers.

Ascendere Associates LLC January 27, 2011


J. Stephen Castellano Page 11 steve@ascenderellc.com
www.ascenderellc.com
Core & Opportunistic Long Model Daily Opportunistic Portfolio Stop Date 10/22/2010 7.26%
1/26/2011 to 1/27/2011
Target/ Date+1
Sector Company Ticker 1/26/2011 1/27/2011 Performance Price Target Stop Target Stop Date Sell Price Return
Consumer Discretionary TRW Automotive Holdings Corp. TRW 59.66 62.48 4.73% None 1/14/2011 $ 60.68 15.14%
Industrials United Continental Holdings, Inc. UAL 25.79 26.96 4.54% $ 27.79 None
Energy RPC Inc. RES 17.08 17.72 3.75% $ 22.38 None
Consumer Discretionary Lear Corp. LEA 106.65 110.50 3.61% None 1/14/2011 $ 109.30 10.73%
Consumer Discretionary Fossil Inc. FOSL 69.42 70.90 2.13% $ 80.03 None
Consumer Discretionary Williams-Sonoma Inc. WSM 32.83 33.28 1.37% $ 41.23 None
Consumer Discretionary Macy's, Inc. M 23.56 23.86 1.27% $ 28.18 None
Financials Waddell & Reed Financial Inc. WDR 36.54 37.00 1.26% $ 39.72 None
Financials Ares Capital Corporation ARCC 16.59 16.79 1.21% $ 18.12 None
Financials T. Rowe Price Group, Inc. TROW 67.29 68.07 1.16% $ 71.11 None
Consumer Discretionary Autoliv, Inc. ALV 80.24 80.92 0.85% $ 88.20 None
Financials PNC Financial Services Group Inc. PNC 61.17 61.67 0.82% $ 68.08 None
Financials East West Bancorp Inc. EWBC 21.83 21.99 0.73% $ 22.25 None
Materials LyondellBasell Industries AF S.C.A. LYB 36.00 36.20 0.56% $ 38.72 None
Industrials Parker Hannifin Corporation PH 88.19 88.65 0.52% $ 95.69 None
Materials Westlake Chemical Corp. WLK 40.02 40.20 0.45% $ 49.56 None
Industrials Dover Corp. DOV 59.39 59.48 0.15% $ 63.96 None
Materials Huntsman Corp. HUN 17.22 17.22 0.00% $ 18.36 None
Industrials Nordson Corp. NDSN 93.50 93.41 -0.10% $ 102.93 None
Materials Albemarle Corp. ALB 57.11 56.88 -0.40% $ 62.13 None
Industrials Avery Dennison Corporation AVY 42.33 42.13 -0.47% $ 46.37 None
Health Care Biogen Idec Inc. BIIB 67.50 67.09 -0.61% $ 73.51 None
Information Technology Avnet Inc. AVT 35.75 35.24 -1.43% $ 37.31 None
Materials Freeport-McMoRan Copper & Gold Inc. FCX 110.32 107.66 -2.41% $ 139.08 None
Information Technology LAM Research Corp. LRCX 54.05 51.79 -4.18% $ 59.27 None

Core & Opportunistic Short Model Daily Opportunistic Portfolio Stop Date 10/8/2010 6.26%
1/26/2011 to 1/27/2011
Target/ Date+1
Sector Company Ticker 1/26/2011 1/27/2011 Performance Price Target Stop Target Stop Date Sell Price Return
Energy Pride International Inc. PDE 33.42 32.94 -1.44% $ 30.48 $ 35.52
Information Technology Alliance Data Systems Corporation ADS 72.96 72.43 -0.73% $ 66.70 $ 75.36
Materials Cemex S.A.B. de C.V. CX 10.38 10.37 -0.10% $ 9.66 $ 11.76
Energy Range Resources Corp. RRC 47.90 47.92 0.04% $ 41.36 $ 48.60
Industrials Bucyrus International Inc. BUCY 90.67 90.78 0.12% $ 75.56 $ 103.24
Energy Weatherford International Ltd. WFT 22.95 22.98 0.13% $ 20.64 $ 24.96
Energy Compagnie Générale de Géophysique-Veritas
CGV 31.18 31.41 0.74% $ 26.54 $ 34.64
Materials Packaging Corp. of America PKG 28.55 28.83 0.98% 1/10/2011 $ 28.07 8.63%
Energy Tidewater Inc. TDW 56.53 57.75 2.16% 1/27/2011 $ 57.75 7.26%
Consumer Discretionary Harley-Davidson Inc. HOG 39.36 40.28 2.34% 1/25/2011 $ 39.36 13.53%
Financials ProLogis PLD 14.70 15.87 7.96% 1/27/2011 $ 15.87 9.90%

Ascendere Associates LLC January 27, 2011


J. Stephen Castellano Page 12 steve@ascenderellc.com
www.ascenderellc.com
Month to Date Returns

Ascendere Associates LLC January 27, 2011


J. Stephen Castellano Page 13 steve@ascenderellc.com
www.ascenderellc.com
Core & Opportunistic Long Model MTD Opportunistic Portfolio Stop Date 10/22/2010 7.26%
12/31/2010 to 1/27/2011
Target/ Date+1
Sector Company Ticker 12/31/2010 1/27/2011 Performance Price Target Stop Target Stop Date Sell Price Return
Consumer Discretionary TRW Automotive Holdings Corp. TRW 52.70 62.48 18.56% None 1/14/2011 $ 60.68 15.14%
Industrials United Continental Holdings, Inc. UAL 23.82 26.96 13.18% $ 27.79 None
Financials East West Bancorp Inc. EWBC 19.55 21.99 12.48% $ 22.25 None
Consumer Discretionary Lear Corp. LEA 98.71 110.50 11.94% None 1/14/2011 $ 109.30 10.73%
Materials Huntsman Corp. HUN 15.61 17.22 10.31% $ 18.36 None
Information Technology Avnet Inc. AVT 33.03 35.24 6.69% $ 37.31 None
Financials T. Rowe Price Group, Inc. TROW 64.54 68.07 5.47% $ 71.11 None
Materials LyondellBasell Industries AF S.C.A. LYB 34.40 36.20 5.23% $ 38.72 None
Financials Waddell & Reed Financial Inc. WDR 35.29 37.00 4.85% $ 39.72 None
Industrials Parker Hannifin Corporation PH 86.30 88.65 2.72% $ 95.69 None
Consumer Discretionary Autoliv, Inc. ALV 78.94 80.92 2.51% $ 88.20 None
Materials Albemarle Corp. ALB 55.78 56.88 1.97% $ 62.13 None
Financials Ares Capital Corporation ARCC 16.48 16.79 1.88% $ 18.12 None
Industrials Dover Corp. DOV 58.45 59.48 1.76% $ 63.96 None
Industrials Nordson Corp. NDSN 91.88 93.41 1.67% $ 102.93 None
Financials PNC Financial Services Group Inc. PNC 60.72 61.67 1.56% $ 68.08 None
Consumer Discretionary Fossil Inc. FOSL 70.48 70.90 0.60% $ 80.03 None
Health Care Biogen Idec Inc. BIIB 67.05 67.09 0.06% $ 73.51 None
Information Technology LAM Research Corp. LRCX 51.78 51.79 0.02% $ 59.27 None
Industrials Avery Dennison Corporation AVY 42.34 42.13 -0.50% $ 46.37 None
Energy RPC Inc. RES 18.12 17.72 -2.21% $ 22.38 None
Consumer Discretionary Macy's, Inc. M 25.30 23.86 -5.69% $ 28.18 None
Consumer Discretionary Williams-Sonoma Inc. WSM 35.69 33.28 -6.75% $ 41.23 None
Materials Westlake Chemical Corp. WLK 43.47 40.20 -7.52% $ 49.56 None
Materials Freeport-McMoRan Copper & Gold Inc.FCX 120.09 107.66 -10.35% $ 139.08 None

Core & Opportunistic Short Model MTD Opportunistic Portfolio Stop Date 10/8/2010 6.26%
12/31/2010 to 1/27/2011
Target/ Date+1
Sector Company Ticker 12/31/2010 1/27/2011 Performance Price Target Stop Target Stop Date Sell Price Return
Materials Cemex S.A.B. de C.V. CX 10.71 10.37 -3.17% $ 9.66 $ 11.76
Energy Pride International Inc. PDE 33.00 32.94 -0.18% $ 30.48 $ 35.52
Energy Weatherford International Ltd. WFT 22.80 22.98 0.79% $ 20.64 $ 24.96
Industrials Bucyrus International Inc. BUCY 89.40 90.78 1.54% $ 75.56 $ 103.24
Information Technology Alliance Data Systems Corporation ADS 71.03 72.43 1.97% $ 66.70 $ 75.36
Energy Compagnie Générale de Géophysique-Veritas
CGV 30.59 31.41 2.68% $ 26.54 $ 34.64
Energy Range Resources Corp. RRC 44.98 47.92 6.54% $ 41.36 $ 48.60
Energy Tidewater Inc. TDW 53.84 57.75 7.26% 1/27/2011 $ 57.75 7.26%
Financials ProLogis PLD 14.44 15.87 9.90% 1/27/2011 $ 15.87 9.90%
Materials Packaging Corp. of America PKG 25.84 28.83 11.57% 1/10/2011 $ 28.07 8.63%
Consumer Discretionary Harley-Davidson Inc. HOG 34.67 40.28 16.18% 1/25/2011 $ 39.36 13.53%

Ascendere Associates LLC January 27, 2011


J. Stephen Castellano Page 14 steve@ascenderellc.com
www.ascenderellc.com
DISCLOSURES
Ascendere is in the business of providing equity research and related consulting services to investors and their advisors. The equity research it provides includes
basic quantitative model portfolios and more detailed fundamental research with respect to individual stocks. In addition, the firm manages stock portfolios for
itself and clients. Ascendere currently sources financial data from Capital IQ.

Ascendere does not rate stocks on any scale, but does offer individual stock commentary and valuation opinions. With regard to Ascendere's portfolio
strategies, "long" or "high-quality" baskets should generally be considered buys, unless otherwise noted. Stocks in our "short" or "low-quality" baskets should
generally be considered sells, unless otherwise noted. While exceptions may occasionally occur, typically stocks in the high-quality basket are expected to
outperform the S&P 500 over a month's time and stocks in the low-quality basket are expected to underperform. A more relevant benchmark would comprise
of all stocks and ADRs that trade on major U.S. stock exchanges with a market cap above $2 billion.

Ascendere adheres to professional standards and abides by codes of ethics that put the interests of clients ahead of its own. The following are specific
disclosures made by Ascendere:

1) Ascendere may have a financial interest in the companies referred to in this report ("the Companies"). The research analyst covering the Companies
and members of the analyst's immediate family have a financial interest in one or more of the Companies.

2) Ascendere generates revenue from research subscription revenue and portfolio management fees. At any given time it may be long or short any of
the Companies.

3) Ascendere does not make a market in the securities of any of the Companies.

4) Ascendere has not received compensation from the Companies.

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6) Neither Ascendere nor any of its officers or any family member of the covering analyst serve as an officer, director or advisory board member of any
of the Companies.

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the Companies.

8) The covering analyst certifies that this report accurately reflects such analyst's personal views.

Ascendere Associates LLC January 27, 2011


J. Stephen Castellano Page 15 steve@ascenderellc.com
www.ascenderellc.com
DISCLAIMERS
This report is intended for informational purposes only and does not constitute a recommendation, or an offer, to buy or sell any securities or related financial
instruments. The report is not intended to be in furtherance of the specific investment objectives, financial situation, or particular needs of any individual
recipient. The information contained herein accurately reflects the opinion of Ascendere at the time the report was released. The opinions of Ascendere are
subject to change at any time without notice and without obligation or notification. The officers, affiliates or family members of Ascendere Associates may hold
positions in the securities of the Companies. No warranty is made as to the accuracy of the information contained herein. This information is intended for the
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risk of total loss. For additional information on risks, disclosures, disclaimers and frequently asked questions, please see the back of any monthly report.

Ascendere Associates LLC January 27, 2011


J. Stephen Castellano Page 16 steve@ascenderellc.com
www.ascenderellc.com