Please read carefully our disclaimers at the end of this newsletter. Market Stance: BULLISH (since December 15, 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, Wednesday, December 15, 2004, I bought SYXI, first for client accounts, then for my personal accounts. IXYS Corp. makes power semiconductors and mixed-signal integrated circuits. Details may be found at their website. Here's why I bought this stock: + Technical buy signal: Yesterday, the stock was down 61c intraday to $9.00 before rebounding to close up 29c at $9.90. This bullish reversal was accompanied by an enormous volume spike. Yesterday's volume was 5.65 million shares. Average daily volume is about 64,000 shares. In other words, yesterday's volume was about 89x average. There was a news item indicating that a Swiss company, ABB Ltd., sold 5.16 million shares, a 15.5% stake in the company. That explains the price drop early in the day. What impresses me is that, in spite of this huge amount of selling, by the end of the day, the stock price had recovered and then some. + The stock's 200-day moving average has recently transitioned from falling to rising. + Excellent recent sales growth: Here are the quarterly year-to-year sales growth rates from the last four quarters, in chronological order: +43%, +42%, +50%, and, most recently, for the quarter ended Sep 30, +43% to $61.4 million. + The company has recently returned to profitability, after two years of losses. Here are the quarterly EPS figures for the last eight quarters: Dec 03 vs Dec 02: 1c vs (6c) Mar 04 vs Mar 03: (16c) vs (17c) Jun 04 vs Jun 03: 5c vs 1c Sep 04 vs Sep 03: 11c vs (1c) + Strong earnings estimates: According to recent data from First Call, the consensus earnings estimate for FY 05 is 40c, up from 38c 90 days ago; and the consensus estimate for FY 06 is 66c, unchanged from 90 days ago. + Valuation: At 15 times next year's estimated earnings, the stock is very attractively priced. (The 5-year projected earnings growth rate was unavailable.) This is a major factor in my decision to buy. + History of earnings surprises: After missing estimates for the prior three quarters, the company's earnings came in 3c ahead of estimates for the most recent quarter ended Sep 30. + The company's industry group ("Semiconductor Manufacturing") is ranked #39 for relative strength out of 197 industry groups tracked by Investor's Business Daily. This ranking changes daily, and it has been generally rising over recent weeks and months. -KD, December 15, 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. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||