The Deen's List(TM) A service of Deen Capital Management, Inc. Vol.1 #9 Friday October 3 2003 2:00pm ET Please read carefully our disclaimers at the end of this newsletter. Market stance: BULLISH (since Oct 3 2003) ******************************* Summary ******************************** Bought AMI Bought BRCM Bought NXTL Bought SINA Bought UTSI ****************************** Bought AMI ****************************** Alaris Medical Systems Inc (AMI) Net buy price in managed accounts(*)... $17.42 Yesterday's close (Oct 02)............. $17.22 Net change (based on avg buy price).... +$0.20 Today's volume as of 12:45pm ET........ 42,300 ($0.7 million) Average daily volume................... 224,500 ($3.9 million) This year's earnings-per-share......... $0.40 (est) Next year's earnings-per-share......... $0.61 (est) P/E using next year's earnings......... 28.7 (est) Earnings growth rate, next 5 years..... 80.0% per year (est) (*) The "Net buy price" is the total net purchase cost after commissions for all managed accounts divided by the total number of shares. Alaris Medical (www.alarismed.com) makes infusion systems, patient monitoring systems and related technologies. Here's why I bought this stock: + Technical: The stock broke out of an 11-week trading range back on Sep 24. That breakout failed (ie, the stock price retreated back into its old trading range). It is now attempting to break out again. + Excellent recent sales growth: Here are the quarterly year-to-year sales growth rates from the last four quarters, in chronological order: +9%, +20%, +16%, and, most recently, for the quarter ended Jun 30, +18% to $127.8 million. + Excellent recent earnings-per-share growth: Here are the quarterly EPS figures for the last eight quarters: Sep 02 vs Sep 01: 3c vs (2c) Dec 02 vs Dec 01: 7c vs (3c) Mar 03 vs Mar 02: 4c vs 1c Jun 03 vs Jun 02: 7c vs 2c + Sharply rising estimates: According to recent data from First Call, the consensus earnings estimate for 2003 is 40c, up from 24c 90 days ago; and the consensus estimate for 2004 is 61c, up from 40c 90 days ago. + Valuation: At 29 times next year's estimated earnings and a projected 5-year annualized earnings growth rate of 80%, the stock is attractively priced. + History of earnings surprises: This company has reported earnings at least 2c ahead of estimates in each of the past three quarters. ***************************** Bought BRCM ****************************** Broadcom Corp Cl A (BRCM) Net buy price in managed accounts(*)... $29.05 Yesterday's close (Oct 02)............. $27.00 Net change (based on avg buy price).... +$2.05 Today's volume as of 12:56pm ET........ 9.1 million ($264.2 million) Average daily volume................... 13.4 million ($390.2 million) This year's earnings-per-share......... $0.43 (est) Next year's earnings-per-share......... $0.64 (est) P/E using next year's earnings......... 45.5 (est) Earnings growth rate, next 5 years..... 30.0% per year (est) (*) The "Net buy price" is the total net purchase cost after commissions for all managed accounts divided by the total number of shares. Broadcom (www.broadcom.com) develops integrated silicon solutions that enable the broadband communications of voice, video and data. Here's why I bought this stock: + Breakout: As I write this, the stock is attempting to break out of a 4-month trading range. Only a couple of days in July stand in the way of making today a 52-plus-week high. (The high was July 8, when the stock closed at $29.52.) + Excellent recent sales growth: Here are the quarterly year-to-year sales growth rates from the last four quarters, in chronological order: +36%, +30%, +37%, and, most recently, for the quarter ended Jun 30, +46% to $377.9 million. + Recent re-emergence into profitability after the great tech downturn. Here are the quarterly EPS figures for the last eight quarters: Sep 02 vs Sep 01: (3c) vs (13c) Dec 02 vs Dec 01: (2c) vs (11c) Mar 03 vs Mar 02: 6c vs (8c) Jun 03 vs Jun 02: 10c vs (6c) + Rising estimates: According to recent data from First Call, the consensus earnings estimate for 2003 is 43c, up from 38c 90 days ago; and the consensus estimate for 2004 is 64c, up from 61c 90 days ago. + History of earnings surprises: This company has reported earnings at least a penny ahead of estimates in each of the past three quarters. + The company's industry group ("Elec - Semiconductor Mfg") is ranked #7 out of 197 industry groups for 6-month price performance, according to Investor's Business Daily. The above items were so compelling that I chose to buy the stock in spite of the following negative factor: - Valuation: At 46 times next year's estimated earnings and a projected 5-year annualized earnings growth rate of 30%, the stock may be a bit pricey. ***************************** Bought NXTL ****************************** Nextel Communications A (NXTL) Net buy price in managed accounts(*)... $20.73 Yesterday's close (Oct 02)............. $19.84 Net change (based on avg buy price).... +$0.89 Today's volume as of 12:56pm ET........ 15.6 million ($323.9 million) Average daily volume................... 17.5 million ($362.5 million) This year's earnings-per-share......... $1.10 (est) Next year's earnings-per-share......... $1.46 (est) P/E using next year's earnings......... 14.2 (est) Earnings growth rate, next 5 years..... 11.8% per year (est) (*) The "Net buy price" is the total net purchase cost after commissions for all managed accounts divided by the total number of shares. Nextel (www.nextel.com) is a leading provider of digital wireless communications throughout the U.S. Here's why I bought this stock: + News: On Wed Oct 1, the company CEO said he remains bullish on the wireless industry and his company's ability to grow market share. + Breakout: As I write this, the stock is breaking out of an 11-week trading range. + Excellent recent sales growth: Here are the quarterly year-to-year sales growth rates from the last four quarters, in chronological order: +14%, +12%, +21%, and, most recently, +19%. + Excellent recent earnings-per-share growth: Here are the quarterly EPS figures for the last eight quarters: Sep 02 vs Sep 01: 14c vs (68c) Dec 02 vs Dec 01: 21c vs (2.22) Mar 03 vs Mar 02: 20c vs (35c) Jun 03 vs Jun 02: 27c vs (5c) + Rising estimates: According to recent data from First Call, the consensus earnings estimate for 2003 is $1.10, up from 94c 90 days ago; and the consensus estimate for 2004 is $1.46, up from $1.24 90 days ago. + Valuation: At 14 times next year's estimated earnings and a projected 5-year annualized earnings growth rate of 12%, the stock is moderately priced. + History of earnings surprises: This company has reported earnings at least 3c ahead of estimates in each of the past four quarters. + The company's industry group ("Telecom - Wireless Svcs") is ranked #14 out of 197 industry groups for 6-month price performance, according to Investor's Business Daily. ***************************** Bought SINA ****************************** Sina Corp (SINA) Net buy price in managed accounts(*)... $38.49 Yesterday's close (Oct 02)............. $37.47 Net change (based on avg buy price).... +$1.02 Today's volume as of 12:56pm ET........ 7.5 million ($288.7 million) Average daily volume................... 9.9 million ($379.3 million) This year's earnings-per-share......... $0.62 (est) Next year's earnings-per-share......... $1.01 (est) P/E using next year's earnings......... 38.1 (est) Earnings growth rate, next 5 years..... 40.0% per year (est) (*) The "Net buy price" is the total net purchase cost after commissions for all managed accounts divided by the total number of shares. Sina Corp. (www.sina.com) is a Chinese Internet portal offering media content and services for China and Chinese communities around the world. Here's why I bought this stock: + Technical: This very strong stock (+491% year-to-date!) has advanced only a point or so since hitting a peak last July. And there was an extremely heavy-volume selloff/rebound on Sep 26 and 29. Also, on Sep 26 and Oct 1, the stock touched its 50-day moving average for the first time since March. I am interpreting that as a buying opportunity. + Excellent recent sales growth: Here are the quarterly year-to-year sales growth rates from the last four quarters, in chronological order: +71%, +90%, +154%, and, most recently, for the quarter ended Jun 30, +204% to $26.0 million. + Recent emergence into profitability: Here are the quarterly EPS figures for the last eight quarters: Sep 02 vs Sep 01: (1c) vs (7c) Dec 02 vs Dec 01: 4c vs (6c) Mar 03 vs Mar 02: 8c vs (4c) Jun 03 vs Jun 02: 18c vs (3c) + Rising estimates: According to recent data from First Call, the consensus earnings estimate for 2003 is 62c, up from 49c 90 days ago; and the consensus estimate for 2004 is $1.01, up from 81c 90 days ago. + Valuation: At 38 times next year's estimated earnings and a projected 5-year annualized earnings growth rate of 40%, the stock is moderately priced. + The company's industry group ("Internet - Content") is ranked #7 out of 197 industry groups for 6-month price performance, according to Investor's Business Daily. ***************************** Bought UTSI ****************************** Utstarcom Inc (UTSI) Net buy price in managed accounts(*)... $35.43 Yesterday's close (Oct 02)............. $34.26 Net change (based on avg buy price).... +$1.17 Today's volume as of 12:56pm ET........ 3.3 million ($118.3 million) Average daily volume................... 4.1 million ($144.5 million) This year's earnings-per-share......... $1.59 (est) Next year's earnings-per-share......... $1.90 (est) P/E using next year's earnings......... 18.7 (est) Earnings growth rate, next 5 years..... 22.0% per year (est) (*) The "Net buy price" is the total net purchase cost after commissions for all managed accounts divided by the total number of shares. UTStarcom (www.utstarcom.com) makes products which provide a seamless migration from wired to wireless, from narrowband to broadband, and from circuit- to packet-based networks. The company's customers are public telecommunications service providers in rapidly growing markets around the world. Here's why I bought this stock: + News: On Wed Oct 1 after the close, the company raised its earnings and revenue outlook for the rest of the year. The stock responded with a heavy-volume rally the next day, Thu Oct 2. + True surprise: Prior to the news, the stock was trading near a 3-month low. + Excellent recent sales growth: Here are the quarterly year-to-year sales growth rates from the last four quarters, in chronological order: +56%, +53%, +80%, and, most recently, for the quarter ended Jun 30, +75% to $405.8 million. + Excellent recent earnings-per-share growth: Here are the quarterly EPS figures for the last eight quarters: Sep 02 vs Sep 01: 29c vs 20c Dec 02 vs Dec 01: 34c vs 24c Mar 03 vs Mar 02: 35c vs 15c Jun 03 vs Jun 02: 49c vs 23c + Rising estimates: According to recent data from First Call, the consensus earnings estimate for 2003 is $1.59, up from $1.52 90 days ago; and the consensus estimate for 2004 is $1.90, up from $1.86 90 days ago. + Valuation: At 19 times next year's estimated earnings and a projected 5-year annualized earnings growth rate of 22%, the stock is attractively priced. + History of earnings surprises: This company has reported earnings at least 2c ahead of estimates in each of the past two quarters. + The company's industry group ("Telecom - Wireless Equipment") is ranked #7 out of 197 industry groups for 6-month price performance, according to Investor's Business Daily. *********************** Subscription Information *********************** Welcome to The Deen's List(TM), a new e-mail stock newsletter from Deen Capital Management, Inc. My intention is to inform you as quickly as is practical regarding my stock market moves. When I buy or sell a stock, first I take care of client accounts, then I buy/sell for my personal account(s), and then, third, I send out this newsletter. Your feedback is welcome. Send e-mail to deenslist@deencapital.com. To subscribe or unsubscribe, include the word "subscribe" or "unsubscribe" in the Subject line. This newsletter is free to managed account clients. For a limited time, it is also free to all interested parties. **************************** Privacy Policy **************************** Your personal information, including your e-mail address, will be held in confidence by Deen Capital Management, Inc. We will not share it with or sell it to others. ************************ IMPORTANT DISCLAIMERS ************************* * All stocks discussed in The Deen's List(TM) involve a high degree of risk. It should not be assumed that any stock discussed in The Deen's List(TM) or purchased by Deen Capital Management, Inc. will be profitable. * Past performance is not necessarily indicative of future results. * The information contained herein has been compiled from sources deemed to be reliable; however, we are not responsible for its accuracy or completeness. ************************************************************************ Ken Deen Deen Capital Management, Inc. PO Box 30925 Santa Barbara, CA 93130 (805) 682-1870 deenslist@deencapital.com Copyright (C) 2003 Deen Capital Management, Inc.