The Deen's List(TM)
A service of Deen Capital Management, Inc.
Vol.1 #29           Tuesday October 21 2003           11:36am ET

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

Market stance: BULLISH (since Oct 3 2003)

****************************** Bought TXN ******************************

Texas Instruments Inc (TXN)

Net buy price in managed accounts(*)... $27.60
Yesterday's close (Oct 20)............. $25.67
Net change (based on net buy price).... +$1.93
Today's volume as of 9:59am ET ........ 10.2 million ($280.3 million)
Average daily volume................... 11.6 million ($321.2 million)
This year's earnings-per-share......... $0.34 (est)
Next year's earnings-per-share......... $0.67 (est)
P/E using next year's earnings......... 41.2 (est)
Earnings growth rate, next 5 years..... 20.0% 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.

On Tue Oct 21, I bought TXN.  Texas Instruments is the huge global
semiconductor company.  They design and sell digital signal processors
and analog integrated circuits.

Here's why I bought this stock:

+ News: On Mon Oct 20 after the close, the company announced results for
the quarter ended Sep 30.  Earnings-per-share for the quarter came in at
25c, blowing away both last year's 11c and the First Call consensus of
9c.  Revenue was up 13% to $2.53 billion.  Orders for the quarter rose
26% from the year-ago quarter.

+ News: The company raised guidance significantly for the fourth quarter.
They now expect revenue of $2.49 to $2.7 billion (First Call $2.5
billion) and earnings-per-share of 14c to 19c (First Call 11c).

+ Breakout:  The stock is breaking out today, Tue Oct 21, on heavy volume
from a six-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:
+20%, +20%, +8%, and, just announced, +13%.

+ Excellent recent earnings-per-share growth:  Here are the quarterly EPS
figures for the last eight quarters:
Dec 02 vs Dec 01: 6c vs (5c)
Mar 03 vs Mar 02: 7c vs 1c
Jun 03 vs Jun 02: 7c vs 6c
Sep 03 vs Sep 02: 25c vs 11c

+ Next year's projected earnings-per-share of 67c are 97% above this
year's projection of 68c.

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

+ The company's industry group ("Electronics - Semiconductor Mfg") is a
market leader.  It is ranked 9th out of 197 industry groups tracked by
Investor's Business Daily for six-month price performance.

I chose to buy this stock in spite of the following negative factor:

- Slightly falling estimates:  According to recent data from First Call,
the consensus earnings estimate for 2003 is 34c, down from 35c 90 days
ago; and the consensus estimate for 2004 is 67c, down from 68c 90 days
ago.  I'm ignoring this negative because this data reflects analysts'
views prior to the huge surprise cited above.

- Valuation:  At 41 times next year's estimated earnings and a projected
5-year annualized earnings growth rate of 20%, the stock is pricey.  (On
the other hand, this is based on analysts' growth projections, which,
we are just now learning, may be low.)

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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.

* Past performance is not necessarily indicative of future results.

* The information contained herein has been compiled from sources deemed
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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.