The Deen's List(TM)
A service of Deen Capital Management, Inc. (www.deencapital.com)
Vol.1 #95           Friday, December 26, 2003           11:26am ET

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

Market stance: BULLISH (since Dec 12 2003)

****************** Bought Sharper Image Corp. (SHRP) *******************

Net buy price in managed accounts(*)... $32.30
Yesterday's close (Dec 24)............. $29.97
Net change (based on net buy price).... +$2.33
Today's volume as of 12:59pm ET........ 48,735 ($1.6 million)
Average daily volume................... 308,300 ($10.0 million)
This year's earnings-per-share......... $1.56 (est)
Next year's earnings-per-share......... $1.80 (est)
P/E using next year's earnings......... 18.0 (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 Fri Dec 26, I bought SHRP.  Sharper Image (www.sharperimage.com)
is a specialty retailer and product developer.  They operate 127
stores in 32 states and the District of Columbia.  They also sell
their catalog of wares over the Internet.

Here's why I bought this stock:

+ News:  On Fri Dec 26 before the open, the company raised its earnings
guidance for the fourth quarter and full year due to robust holiday
sales.  From Dec 1 to Dec 24, same-store sales increased 21%, and total
sales 30%, versus the same period last year.  About a month ago, the
company raised this year's (FY 04 [Jan]) guidance from $1.45-to-$1.50
to $1.55-to-$1.59.  Now, they are raising guidance again, this time
to the range $1.57-to-$1.61.  (The First Call consensus is $1.56.)

+ Breakout:  Back on Nov 12, the stock broke out of a 4-month trading
range.  That breakout failed, as the stock price retreated back into
the old trading range.  On Fri Dec 26, the stock broke out again.
As I write this on the morning of Dec 26, about a half hour after the
opening bell, the stock is up sharply on heavy volume.  The price has
already surpassed the earlier peak of Nov 12, and volume has already
reached the daily average -- in just the first half-hour of trade on
a semi-holiday.

+ Excellent recent sales growth:  Here are the quarterly year-to-year
sales growth rates from the last four quarters, in chronological order:
+31%, +27%, +25%, and, most recently, for the quarter ended Oct 31,
+24% to $131.1 million.

+ Excellent recent earnings-per-share growth:  Here are the quarterly
EPS figures for the last eight quarters:

Jan 03 vs Jan 02: $1.26 vs 98c
Apr 03 vs Apr 02: 5c vs 1c
Jul 03 vs Jul 02: 5c vs (5c)
Oct 03 vs Oct 02: 6c vs (4c)

+ Rising estimates:  According to recent data from First Call, the
consensus earnings estimate for FY 04 is $1.56, up from $1.45 90 days
ago; and the consensus estimate for FY 05 is $1.80, up from $1.66 90
days ago.  (See also "News" above.)

+ Valuation:  At 18 times next year's estimated earnings and a projected
5-year annualized earnings growth rate of 20%, the stock is attractively
priced.

+ History of earnings surprises:  This company has reported earnings
at least a penny ahead of estimates in three of the past four quarters.

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

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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.