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 Rofin-Sinar Tech Inc. (RSTI)
* 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, November 10, 2004, I bought RSTI, first for client accounts, then for my personal accounts. Rofin-Sinar Technologies Inc. (RSTI) designs, develops, engineers, manufactures and markets laser-based products used to cut, weld and mark industrial materials. Here's why I bought this stock: + Blowout earnings surprise: Today, Wed Nov 10, before the open, the company announced results for the quarter ended Sep 30. Earnings came in at 92c per diluted share (vs 39c last year and First Call 50c). Revenue was up 26% to $93.6 million (First Call $86.4 million). + Breakout: The price movement today represents a breakout to a 9-month high. The stock price is about a point away from a breakout to an all-time high. Volume today is huge. As of an hour-and-a-half before the close, volume is 1.55 million shares, versus average daily volume of about 109,000. + Today, the stock is on track to meet my stringent technical buy criteria, as outlined in my Research Update of June 26, 2004: http://www.deencapital.com/newslett/2004/040626.129.html#3 . + The stock's 200-day moving average is rising, indicating a long-term uptrend. + Excellent recent sales growth: Here are the quarterly year-to-year sales growth rates from the last four quarters, in chronological order: +22%, +24%, +27%, and, most recently, as cited above, +26%. + Excellent recent earnings-per-share growth: Here are the quarterly EPS figures for the last eight quarters: Dec 03 vs Dec 02: 41c vs 30c Mar 04 vs Mar 03: 45c vs 29c Jun 04 vs Jun 03: 48c vs 30c Sep 04 vs Sep 03: 92c vs 39c + Rising estimates: According to recent data from First Call, the consensus earnings estimate for the new fiscal year FY 05 (ends Sep 30) is $1.96, up from $1.71 90 days ago. (Estimates for FY 06 are not yet available.) + Valuation: At 19 times this year's estimated earnings and a projected 5-year annualized earnings growth rate of 15%, the stock is attractively priced. + History of earnings surprises: This company has reported earnings at least 5c ahead of estimates in each of the past five quarters (including the just-reported quarter cited above). The relative strength of the company's industry group ("Electronics - Misc Products") has fallen versus one, five and six months ago, but it has risen versus two, three and four months ago. In other words, the trend is ambiguous. This is neither a positive nor a negative. -KD, November 10, 2004
* The net buy (sell) price is the total net cost (proceeds) after commissions for all managed accounts divided by the total number of shares. I sold NAVR due to a possible sell signal from my StockSell Program (Ver.13s). (I will not know for sure whether there is a sell signal until after the closing bell today.) This signal is based purely on technical considerations. I still like this stock, and may buy it again, but I also wanted to raise cash in order to buy RSTI, which I like even better. -KD, November 10, 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. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||