Please read carefully our disclaimers at the end of this newsletter. Market Stance: BULLISH (since Dec 12, 2003) Contents Year-To-Date Performance Year-To-Date Performance
* An average of managed accounts, net after commissions and fees. Individual account results may vary. See also www.deencapital.com/perform.htm. For information on managed accounts, see www.deencapital.com/mgdaccts.htm. Bought NBTY Inc. (NTY)
* 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 Jan 23, I bought NTY. NBTY Inc. (www.nbty.com) is a leading manufacturer and marketer of nutritional supplements. Here's why I bought this stock: + News: On Thu Jan 22 after the close, the company announced results for the quarter ended Dec 31. Earnings came in at 34c per diluted share (vs last year 24c and First Call 28c). Revenue was up 60% to $385 million (First Call estimate $372 million). + Breakout: The next morning, Fri Jan 23, the day I bought, the stock soared on heavy volume, breaking out of a two-and-a-half month trading range. + Excellent and accelerating recent sales growth: Here are the quarterly year-to-year sales growth rates from the last four quarters, in chronological order: +10%, +22%, +49%, and, most recently, as cited above, +60%. + Mostly excellent recent earnings-per-share growth: Here are the quarterly EPS figures for the last eight quarters: Mar 03 vs Mar 02: 34c vs 33c Jun 03 vs Jun 02: 43c vs 30c Sep 03 vs Sep 02: 23c vs 43c Dec 03 vs Dec 02: 34c vs 24c + Rising estimates for next year's earnings: According to recent data from First Call, the consensus earnings estimate for FY 04 (Sep) is $1.68, down from $1.74 90 days ago; and the consensus estimate for FY 05 is $2.10, up from $2.00 90 days ago. + Valuation: At 15 times next year's estimated earnings and a projected 5-year annualized earnings growth rate of 17.5%, the stock is attractively priced. + History of earnings surprises: This company has reported earnings at ahead of estimates in three of the past five quarters (including the just-reported quarter cited above). I chose to buy the stock in spite of the following negative factor: - The company's industry group ("Cosmetics/Personal Care") has fallen in relative strength over the past three months, according to Investor's Business Daily. Sold Quiksilver Inc. (ZQK)
* The net buy (sell) price is the total net cost (proceeds) after commissions for all managed accounts divided by the total number of shares. On Fri Dec 19, I sold ZQK in order to buy NTY. I still like ZQK, but I felt that NTY was a particularly compelling buy, enough so that I was willing to sell ZQK prematurely. Open Positions
* Net buy prices shown are the total net purchase cost after commissions for all managed accounts divided by the total number of shares. Subscription Information Welcome to The Deen's ListTM, 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. Disclaimers All stocks discussed in The Deen's ListTM involve a high degree of risk. It should not be assumed that any stock discussed in The Deen's ListTM 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 Copyright © 2004 Deen Capital Management, Inc. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||