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 Infocrossing Inc. (IFOX)
* 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 17, 2004, I bought IFOX, first for client accounts, then for my personal accounts. Infocrossing, Inc. is a provider of information technology and business process outsourcing services to enterprise clients. They manage all or part of a client's information systems infrastructure and operations. Here's why I bought this stock: + News: Two days ago, on Mon Nov 15, before the open, the company announced results for the quarter ended Sep 30. Earnings came in at 10c per diluted share versus a loss of (39c) last year. Revenue was up 87% to $26.4 million. (First Call estimates are not available.) + A "true surprise"*: Prior to the news, the stock had been trending lower, from a 4-year high of $16.18 on Oct 5 to a 10-week low of $12.90 on Nov 12 just before the news. Then, Monday, in the wake of the news, the stock soared $1.60, or 12%, on heavy volume. Yesterday, the stock gained another 3.4% to $15 (after hitting $16.19 intraday), on extremely heavy. Volume yesterday, at 1.3 million shares, was an all-time record. * "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). + Excellent and accelerating recent sales growth: Here are the quarterly year-to-year sales growth rates from the last four quarters, in chronological order: +8%, +16%, +81%, and now, as cited above, +87%. + Recent re-emergence into profitability after four years of losses: Here are the quarterly EPS figures for the last eight quarters: Dec 03 vs Dec 02: 8c vs (34c) Mar 04 vs Mar 03: 5c vs (40c) Jun 04 vs Jun 03: (1c) vs (45c) Sep 04 vs Sep 03: 10c vs (39c) + Very strong estimates (though this year's estimate has dropped slightly): According to recent data from First Call, the consensus earnings estimate for 2004 is 38c, down from 40c 90 days ago; and the consensus estimate for 2005 is 86c, unchanged from 90 days ago. Note that next year's estimate is more than double this year's. + Valuation: At 17 times next year's estimated earnings and a projected 5-year annualized earnings growth rate of 40%, the stock is very attractively priced. (Earnings surprise history data are not available.) + The company's industry group ("Computer - Tech Services") has risen dramatically in relative strength over the past six months, according to data from Investor's Business Daily. + The stock's 200-day moving average is rising, indicating a long-term uptrend. -KD, November 17, 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. Yesterday, AMED stock fell 10% on extremely heavy volume. Volume, in fact that set an all-time record for this stock by a wide margin. From a technical point-of-view, this is worrisome. Because of this, I decided to sell today, locking in a very small but still positive gain. -KD, November 17, 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. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||