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 NCI Building Systems Inc. (NCS)
* The "Net buy price" is the total net purchase cost after commissions for all managed accounts divided by the total number of shares. Today, Tuesday, November 16, 2004, I bought NCS, first for client accounts, then for my personal accounts. NCI Building Systems, Inc. is an integrated manufacturer of metal products for the building industry. Here's why I bought this stock: + Breakout: Yesterday, the stock broke out of an 11-week trading range into all-time high territory on extremely heavy volume. + Explosion in trading volume, mostly to the buy side: On Nov 8, average daily volume was about 93,000 shares. Then boom, a volume explosion. Every day since then has seen volume of at least 685,800 shares, ranging up to 1.6 million shares. Today's volume may be a hair less. As I write this, volume stands at 551,000 shares, with an hour and ten minutes left to go. Still dramatically above the old average. + Excellent recent sales growth: Here are the quarterly year-to-year sales growth rates from the last four quarters, in chronological order: +0%, +4%, +28%, and, most recently, for the quarter ended Jul 31, +25% to $295.8 million. + Excellent recent earnings-per-share growth: Here are the quarterly EPS figures for the last eight quarters: Oct 03 vs Oct 02: 43c vs 62c Jan 04 vs Jan 03: 29c vs 20c Apr 04 vs Apr 03: 39c vs 11c Jul 04 vs Jul 03: 69c vs 36c + Rising estimates: According to recent data from First Call, the consensus earnings estimate for FY 04 (Oct) is $2.31, up from $1.68 90 days ago; and the consensus estimate for FY 05 is $2.91, up from $1.96 90 days ago. + Valuation: At 12 times this year's (FY 05) estimated earnings and a projected 5-year annualized earnings growth rate of 20%, the stock is very attractively priced. + History of earnings surprises: This company has reported earnings at least a penny ahead of estimates in each of the past four quarters. + The stock's 200-day moving average is rising, indicating a long-term uptrend. I chose to buy the stock in spite of the following negative factor: - The company's industry group ("Metal Processing & Fabrication") currently is ranked #26 out of 197 groups for relative strength, according to data from Investor's Daily. That is down from one to five months ago, though it is up versus six months ago. Generally, the group's ranking is falling slightly. -KD, November 16, 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. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||