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.
* 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 23, 2004, I bought BXG, first for client accounts, then for my personal accounts. Bluegreen Corp. provides vacation and residential lifestyle choices through its resorts and residential community businesses. Here's why I bought this stock: + Breakout: Today, Nov 23, the stock is breaking out of a seven-and-a-half month trading range on heavy volume, to a 17-year high. + Excellent and accelerating recent sales growth: Here are the quarterly year-to-year sales growth rates from the last four quarters, in chronological order: +33%, +33%, +44%, and, most recently, for the quarter ended Sep 30, +48% to $190.6 million. + Excellent recent earnings-per-share growth: Here are the quarterly EPS figures for the last eight quarters: Dec 03 vs Dec 02: 26c vs 10c Mar 04 vs Mar 03: 17c vs 9c Jun 04 vs Jun 03: 31c vs 23c Sep 04 vs Sep 03: 57c vs 36c + Rising estimates: According to recent data from First Call, the consensus earnings estimate for 2004 is $1.34, up from $1.20 90 days ago; and the consensus estimate for 2005 is $1.60, up from $1.48 90 days ago. + Valuation: At 9 times next year's estimated earnings and a projected 5-year annualized earnings growth rate of 18%, the stock is very attractively priced. + History of earnings surprises: I only have earnings surprise data on one quarter -- the quarter ended Sep 30 2004. For this, the most recently reported quarter, earnings came in 10c ahead of estimates. + The company's industry group ("Leisure Services") is ranked #75 out of 197 groups for relative strength, according to data from Investor's Business Daily. This ranking has remained relatively stable over the past three months. + The stock's 200-day moving average is rising, indicating a long-term uptrend. -KD, November 23, 2004 Bought Excel Maritime Carriers (EXM)
* 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 23, 2004, I bought EXM, first for client accounts, then for my personal accounts. Excel Maritime Carriers is an independent shipping company that owns and operates dry bulk carrier vessels. The company provides worldwide sea borne transportation services for dry bulk cargo. Here's why I bought this stock: + News: The company recently bought two bulk carrier vessels to add to its fleet. These acquisitions were announced Nov 8 before the open and Nov 16 before the open. + A "true surprise"*: Prior to news of the second acquisition, the stock had been in an intermediate-term downtrend, from $59.25 on Sep 21 to $22.32 on Nov 12. Then, on Nov 15 and 16, the stock soared on heavy volume. Thanks to subsequent profit-taking, we were able to buy today just slightly below the closing price of the first of those two up days. * "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). + That intermediate-term downtrend I mentioned never threatened the stock's longer-term uptrend. The 200-day moving average has been continuously rising. Back in July, the stock could be had for $7 and change. So, even though the stock fell 62% during that seven-week downtrend, it was preceded by a 735% eight-week move to the upside. This is a hugely volatile stock, even by my standards! I suspect that the long-term uptrend is just beginning to re-assert itself. + Explosion in trading volume. Prior to August, average daily volume was about 1,700 shares. Now, the daily average is about 307,000. The price has moved over that time frame from $7.95 to $27, so we can deduce that the explosion in volume was mostly on the buy side. + Excellent recent sales growth: Here are the quarterly year-to-year sales growth rates from the last four quarters, in chronological order: +72%, +102%, +102%, and, most recently, for the quarter ended Sep 30, +51% to $9.4 million. + Excellent recent earnings-per-share growth: Here are the quarterly EPS figures for the last eight quarters: Dec 03 vs Dec 02: 24c vs 3c Mar 04 vs Mar 03: 74c vs 16c Jun 04 vs Jun 03: 75c vs 16c Sep 04 vs Sep 03: 46c vs 19c (Data on earnings estimates and earnings surprise was not available. I presume this is because this small stock is not followed by Wall Street analysts.) + Valuation: At 13 times trailing 12-month earnings, the stock is very attractively priced. + The company's industry group ("Transportation - Ship") is very strong. It has been rising in relative strength over recent weeks and months, according to data from Investor's Business Daily. It now ranks #2 out of 197 groups. -KD, November 23, 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. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||