The Deen's List(TM)
A service of Deen Capital Management, Inc. (www.deencapital.com)
Vol.1 #33           Thursday October 23 2003           3:24pm ET

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

Market stance: BULLISH (since Oct 3 2003)

***************************** Bought THER ******************************

Therasense Inc (THER)

Net buy price in managed accounts(*)... $16.88
Yesterday's close (Oct 22)............. $12.52
Net change (based on net buy price).... +$4.36
Today's volume as of 2:08pm ET ........ 3.6 million ($60.3 million)
Average daily volume................... 309,700 ($5.2 million)
This year's earnings-per-share......... -$0.20 (est)
Next year's earnings-per-share......... $0.23 (est)
P/E using next year's earnings......... 73.9 (est)
Earnings growth rate, next 5 years..... 26.3% 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.

TheraSense (www.therasense.com) develops, manufactures and sells easy-
to-use glucose monitoring systems which dramatically reduce the pain of
testing for people with diabetes.

Here's why I bought this stock:

+ News:  On Wed Oct 22 after the close, the company announced results for
the quarter ended Sep 30.  Earnings came in at 6c per diluted share (vs
last year loss of 23c and First Call breakeven).  Revenue was up 49% to
$58.2 million (First Call estimate $57 million).

+ A "true surprise"(*):  The stock had been trading near the low end of
its 3-month trading range prior to the news.

(*) "True surprise" is my term to describe a company news item that
ignites heavy buying and that was not preceded by a short-term runup in
the stock price (i.e. not preceded by rumor).

+ Breakout:  The price movement today represents a breakout from a 3-
month trading range on extremely heavy volume.  At the time I decided to
buy, volume for Oct 23 had already reached 3.6 million shares.  Average
daily volume is only 310,000.

+ Excellent recent sales growth (except for the June quarter):  Here are
the quarterly year-to-year sales growth rates from the last four
quarters, in chronological order: +74%, +23%, -14%, and, just announced
+49%.

+ Emergence into profitability:  The quarter just announced marks the
company's first profitable quarter.

+ Rising estimates:  According to recent data from First Call, the
consensus earnings estimate for FY 03 (Jun) is (20c), up from (33c) 90
days ago; and the consensus estimate for FY 04 is 23c, up from 20c 90
days ago.

+ History of earnings surprises:  This company has reported earnings at
least 6c ahead of estimates in each of the past three quarters (including
the just-reported quarter cited above).

The above items were so compelling that I chose to buy the stock in spite
of the following negative factors:

- Valuation:  At 73 times next year's estimated earnings and a projected
5-year annualized earnings growth rate of 26%, the stock is pricey.
However, that is based on analysts' projections which we have just
learned were quite low for the quarter just ended.

- The company's industry group ("Medical Products") has risen in
relative strength over the past six months, according to Investor's
Business Daily.

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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
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.