The Deen's List(TM)
A service of Deen Capital Management, Inc.
Vol.1 #25           Thursday October 16 2003           1:31pm ET

Please read carefully our disclaimers at the end of this newsletter.

Market stance: BULLISH (since Oct 3 2003)

***************************** Bought QLGC ******************************

Qlogic Corp (QLGC)

Net buy price in managed accounts(*)... $54.23
Yesterday's close (Oct 15)............. $51.48
Net change (based on avg buy price).... +$2.75
Today's volume as of 12:59pm ET........ 7.2 million ($389.9 million)
Average daily volume................... 4.6 million ($247.8 million)
This year's earnings-per-share......... $1.43 (est)
Next year's earnings-per-share......... $1.60 (est)
P/E using next year's earnings......... 33.9 (est)
Earnings growth rate, next 5 years..... 21.0% 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.

QLogic (www.qlogic.com) designs and supplies storage area networking
semiconductor chips, host board adapters and switches.

Here's why I bought this stock:

+ News:  Today, Thu Oct 16, before the open, the company announced
results for the quarter ended Jun 30.  Earnings came in at 37c per
diluted share, excluding a 2c charge, vs last year 28c and First Call
35c.  Revenue was up 23.5% to $132.3 million (First Call estimate $131
million).

+ Breakout:  As I write this, midday on Thu Oct 16, the stock is breaking
out of a 17-month trading range.

+ Excellent recent sales growth:  Here are the quarterly year-to-year
sales growth rates from the last four quarters, in chronological order:
+38%, +33%, +28%, and, just announced, +24%.

+ Excellent recent earnings-per-share growth:  Here are the quarterly EPS
figures for the last eight quarters:
Dec 02 vs Dec 01: 30c vs 20c
Mar 03 vs Mar 02: 33c vs 22c
Jun 03 vs Jun 02: 35c vs 27c
Sep 03 vs Sep 02: 37c vs 28c

+ Rising estimates:  According to recent data from First Call, the
consensus earnings estimate for 2003 is $1.43, up from $1.37 90 days ago;
and the consensus estimate for 2004 is $1.60, up from $1.55 90 days ago.

+ History of earnings surprises:  This company has reported earnings at
least 2c ahead of estimates in each of the past five quarters (including
the just-reported quarter cited above).

+ The company's industry group ("Computer Networking") has risen in
relative strength over the past six months, 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 34 times next year's estimated earnings and a projected
5-year annualized earnings growth rate of 21%, the stock is a bit pricey.
On the other hand, related companies NTAP, BRCD and MCDTA are trading
at even loftier valuations.

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************************ 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.

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************************************************************************

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.