Please read carefully our disclaimers at the end of this newsletter. Market Stance: BULLISH (since August 18, 2004) Contents
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 Monarch Casino & Resort (MCRI)
* The "Net buy price" is the total net purchase cost after commissions for all managed accounts divided by the total number of shares. Today, Wednesday, October 27, 2004, I bought MCRI, first for client accounts, then for my personal accounts. Monarch Casino & Resort, Inc. owns and operates the tropically-themed Atlantis Casino Resort in Reno, Nevada, through its wholly owned subsidiary, Golden Road Motor Inn, Inc. Here's why I bought this stock: + News: On Mon Oct 25 after the close, the company announced results for the quarter ended Sep 30. Earnings came in at 59c per diluted share (vs last year 39c). Revenue was up 11% to $40.4 million. (No analysts are following this small stock, so no estimates and no earnings surprise history are available.) + A "true surprise"*: Since hitting what was then an all-time high of $24.80 on Oct 6, the stock traded in a generally sideways to down pattern for the next two-and-a-half weeks. Then, yesterday, Tue Oct 26, in the wake of the earnings news, the stock soared $2.76, or 11.6%, to a new all-time high of $26.50. Volume was extremely heavy, by the standards of this small stock, at 358,900 shares. That was the heaviest volume day of 2004. * "True surprise" is my term to describe a company news item that ignites heavy buying and that was not preceded by a short-term run-up in the stock price (i.e. not preceded by rumor). + The stock's 200-day moving average is rising, indicating a long-term uptrend. + Double-digit recent sales growth: Here are the quarterly year-to-year sales growth rates from the last four quarters, in chronological order: +5%, +12%, +12%, and, as cited above, +11%. + Excellent recent earnings-per-share growth: Here are the quarterly EPS figures for the last eight quarters: Dec 03 vs Dec 02: 19c vs 13c Mar 04 vs Mar 03: 29c vs 19c Jun 04 vs Jun 03: 46c vs 25c Sep 04 vs Sep 03: 59c vs 39c + Valuation: At 18 times trailing 12-month earnings, the stock is attractively priced. + The company's industry group ("Leisure - Gaming / Equipment") has risen in relative strength over the past three months, according to Investor's Business Daily. -KD, October 27, 2004
* Net buy prices shown are the total net purchase cost after commissions for all managed accounts divided by the total number of shares. ** Current prices are at least 20 minutes old. Welcome to The Deen's ListTM, an 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. Your personal information, including your e-mail address, will be held in strict confidence by Deen Capital Management, Inc. We will not share it with or sell it to others. 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. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||