Chicago Investment Analytics Releases 2002 Upgrade of Value Alert in Pursuit of Stocks With "Unsustainable Cheapness".

Business Editors

CHICAGO--(BUSINESS WIRE)--Feb. 6, 2002

Chicago Investment Analytics (CIA) has released a newly upgraded version of its Value Alert, a stock selection research service for institutional investors. CIA's Co-founder Steve Beaman says that, "In CIA's ten years of conducting research, the new Value Alert has proven itself to be our most powerful stock selection model ever, as demonstrated in backtested model performance figures." The new Value Alert model was created in answer to CIA's research showing that the key to success in "Value" stock investing is finding stocks that have "unsustainable cheapness" to be corrected through stock price appreciation. The mandate of CIA's new Value Alert is to seek out this unsustainable cheapness: to identify stocks that are undervalued, and that show characteristics indicating a strong probability of stock price appreciation within a twelve-month period.

Value Alert differs from other value-oriented strategies by its unique "Alert" component, and by its use of "multidimensional" valuation factors. The Alert component acts to differentiate between the so-called "cheap" stocks likely to remain cheap and those likely to move upward in relative valuation and stock price. It works to quantify (i.e. "value") the expected price impact of recent operating trends as well as management behavior and investor sentiment. Value Alert, like all CIA models, is based in analysis of company fundamentals, but applied in a quantitative execution that allows coverage of over 3,500 stocks.

Since 1991, when Value Alert was initially introduced as CIA's first stock selection model, CIA's research has focused upon the question of "What forces drive future relative stock returns?" in an ongoing search for new sources of alpha, or risk adjusted excess returns. CIA maintains a core competence in understanding what factors drive stock prices and how they can help institutional investors earn excess returns though stock selection. This research utilizes multifactor models based on fundamental inputs in a "bottom-up" approach. By objectively processing both current and historical fundamental data, CIA's Alert stock rankings are an excellent complement to traditional equity analysis methods. The rankings provide a relative measurement of attractiveness for 3,500 + stocks that is the product of applying a truly consistent and unbiased approach across all companies - each stock is examined in a systematic process.

More information about CIA's new Value Alert is available at www.cianet.com, where there is an audio Research Web-cast on the new Value Alert. This provides a full explanation by CIA's Director of Research, Brian Burda, along with charts detailing Value Alert's backtested model performance.

CIA was founded in 1991 as an independent, quantitative equity research firm serving institutional clients. In November of 2000, CIA was purchased by Charles Schwab & Co., Inc. and continues to operate autonomously as Chicago Investment Analytics, a division of Charles Schwab & Co., Inc.