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AlphaProfit Newsletter: May Indicator Update
May 1, 2007

Dear Valued Subscriber,

The AlphaProfit™ model portfolio returns as of April 30, 2007 are as follows:

  ^* Dec. 31, 2006 to Apr. 30, 2007

April was a good month for the equity markets by most measures. The Dow Jones Industrial Average crossed the 13,000 mark for the first time and recorded its best monthly performance since December 2003. Better-than-expected first quarter earnings and ongoing takeover activity enthused investors. Stock price leadership was most pronounced in health care, energy, and technology where earnings exceeded forecasts.

Three of the four industry group funds included in the AlphaProfit model portfolios gained in April. Fidelity Select Software & Computer Services (FSCSX) was the top performer gaining 3.7%. Gains in Fidelity Select Paper & Forest Products (FSPFX) and Fidelity Select Computers (FDCPX) were a tad lower. Fidelity Select Gold (FSAGX) declined to a fractional loss.

Earnings in the computer software and hardware groups were relatively sound although high-profiled misses impacted gains. Robust results from Apple and Microsoft were, for example, partly offset by weak numbers from Yahoo!

As the U. S. dollar declined against the euro and the British pound, gold bullion advanced nearly 2% and helped to partly offset the impact of negative news from gold mining companies. In paper & forest products, investors reacted positively to upbeat comments from Smurfit-Stone Container on future earnings prospects and to optimistic comments from Weyerhaeuser on possibility of lowering corporate taxes.

With a weaker dollar providing a tail-wind for earnings of multi-national companies, large-cap stocks fared better than small-cap and mid-cap stocks. The Spartan 500 Index fund included in the Core model portfolio serves to track the large-cap Standard & Poor's 500 index. This fund out-performed the DJ Wilshire 5000 model portfolio benchmark.

The model portfolio compositions as well as exchange traded fund (ETF) and mutual fund recommendations are available in the Subscriber Login area of the web site. We are not making any changes to the model portfolios at the present time. The funds included in the model portfolios are equally attractive and none of the funds carries a Favored Buy rating.

Maintaining the AlphaProfit Sector Portfolio Indicator at 'Buy on Dips'.

The U. S. economy appears to be decelerating at a rate slower than earlier thought. First–quarter earnings expectations in retrospect turned out to be too conservative and actual results on average exceeded expectations.

Looking ahead, the reporting season for first quarter earnings will taper off in the coming weeks. This may cause inflation and housing-related concerns to return to the forefront. Additionally, catalysts required to propel stock prices materially higher in the near-term are not readily evident. Profit-taking seen during the past few days may well intensify if economic data do not support a 'benign inflation and interest rate' scenario.

We remain cautious in our outlook for equity prices in the near-term. We maintain the AlphaProfit Sector Portfolio Indicator at 'Buy on Dips', the mid-point of the three-point scale. Subscribers getting started in tracking the AlphaProfit model portfolios or adding capital to their investment accounts may want to invest cash during periods of weakness rather than periods of strength.

We welcome your comments.

Best regards,
Sam Subramanian
AlphaProfit Investments, LLC
Ideas. Insights. Results.
http://www.alphaprofit.com

Notes: The AlphaProfit Sector Investors' Newsletter™ is for information purposes only. AlphaProfit Investments, LLC is not soliciting any subscriber to buy or sell any security. Nothing herein should be construed as an offer to buy or sell securities or to give individual investment advice. Before buying or selling any mutual fund, exchange-traded fund, security, or investment, read the prospectus carefully. For securities held in brokerage accounts, read the broker's specific terms and conditions which apply to trading of the securities. AlphaProfit Investments, LLC cannot and does not give any assurance that the present or future model portfolio changes will be profitable. Past performance is not a guarantee for future results. Factual material is obtained from sources believed to be reliable and is provided without warranties of any kind. AlphaProfit Investments, LLC is not responsible for any errors or omissions. AlphaProfit Investments, LLC neither is associated with nor receives any compensation from any of the mutual fund companies, brokers or entities connected with the exchange-traded funds mentioned in the newsletter. Please review our Terms and Conditions of Use and Subscriber Agreement which is available on our website at www.alphaprofit.com; they govern your relationship with AlphaProfit Investments, LLC, including, but not by way of limitation, use of this newsletter. No part of the AlphaProfit Information may be reproduced or re-transmitted in any manner without written permission of AlphaProfit Investments, LLC.

Copyright © 2007. AlphaProfit Investments, LLC. All rights reserved.