Please read carefully our disclaimers at the end of this newsletter. Market Stance: BEARISH (since December 7, 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, Monday, December 13, 2004, I bought RSTI, first for client accounts, then for my personal accounts. Rofin-Sinar Technologies Inc. designs, develops, engineers, manufactures and markets laser-based products, primarily used for cutting, welding and marking a range of materials. Here's why I bought this stock: + This stock broke out of a 10-month trading range back on Nov 23. That breakout failed, but the stock is once again in the neighborhood of its January peak. This could be a prelude to another breakout attempt. + The company's most recent earnings report was a blowout surprise. Earnings for the quarter ended Sep 30, announced on November 10, 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). The stock shot up on extremely heavy volume that day. We are able to buy today at a price that is below the high of November 10. + The heavy volume in this stock recently has been on up days. This is a bullish technical sign. + 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 + Dramatically rising estimates: According to recent data from First Call, the consensus earnings estimate for the new fiscal year FY 05 (ends Sep 30) is $2.65, up from $1.97 90 days ago, and the consensus for FY 06 is $3.00, up from $2.02 90 days ago. + Valuation: At 13 times next year's estimated earnings and a projected 5-year annualized earnings growth rate of 11%, the stock is moderately priced. + History of earnings surprises: This company has reported earnings at least 5c ahead of estimates in each of the past five quarters. + The company's industry group ("Electronics - Misc Products") is ranked #105 for relative strength out of 197 industry groups tracked by Investor's Business Daily. This ranking changes daily, and it has been generally rising in recent months. It is above its 20-, 40-, and 60-day moving averages. -KD, December 13, 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. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||