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. Bought DHB Industries Inc. (DHB)
* The "Net buy price" is the total net purchase cost after commissions for all managed accounts divided by the total number of shares. Today, Thursday, December 23, 2004, I bought DHB, first for client accounts, then for my personal accounts. DHB Industries, Inc. is a holding company consisting of two divisions: DHB Armor Group and DHB Sports Group. The Armor Group makes bullet- and projectile-resistant body armor, and the Sports Group makes protective athletic apparel. Here's why I bought this stock: + News: Midday today, the company announced that it has received a three-year contract to supply body armor to the U.S. Army. The company did not disclose the dollar value of the contract, however, they did say that this contract raises their backlog to more than $500 million. + A "true surprise"*: For four weeks prior to the news, the stock price had been generally falling slightly. * "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). + Breakout: The price movement today represents a breakout from a 4-week trading range into new all-time high territory. Volume is extremely heavy. + 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: +124%, +61%, +52%, and, most recently, for the quarter ended Sep p30, +64% to $89.4 million. + Excellent recent earnings-per-share growth: Here are the quarterly EPS figures for the last eight quarters: Dec 03 vs Dec 02: 6c vs 3c Mar 04 vs Mar 03: 14c vs 12c Jun 04 vs Jun 03: 17c vs 9c Sep 04 vs Sep 03: 18c vs 7c + Strong estimates: According to recent data from First Call, the consensus earnings estimate for 2004 is 65c, up from 64c 90 days ago (and up from 2003 actual earnings of 34c); and the consensus estimate for 2005 is 78c, down from 79c 90 days ago. + Valuation: At 28 times next year's estimated earnings and a projected 5-year annualized earnings growth rate of 20%, the stock is reasonably priced. + History of earnings surprises: This company has reported earnings at least 2c ahead of estimates in each of the past three quarters. + The company's industry group ("Commercial Services - Security / Safety") is ranked #7 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 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. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||