Please read carefully our disclaimers at the end of this newsletter. Market Stance: BULLISH (since September 6, 2005)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, Friday, September 9, 2005, I bought BVF, first for client accounts, then for my personal accounts. Biovail Corp. is a full-service pharmaceutical company involved in the formulation, clinical testing, registration, manufacturing, and marketing of oral controlled-release products. The Company applies its drug delivery technologies to drug compounds to develop both branded and generic products, which are sold throughout North America. Here's why I bought this stock: + New Drug Approval: This morning, the company announced that it has received final FDA approval for its once-daily formulation of tramadol hydrochloride (Tramadol ER) in once-daily 100mg, 200mg and 300mg dosages. Tramadol ER is a new treatment for moderate to moderately severe chronic pain. + Breakout: The stock is soaring today on extremely heavy volume. As of 1:30pm New York time, volume was already more than 11 times the daily average, and easily a 52-week record. The stock is making a decisive breakout today from a five-and-a-half month trading range. (In order to make this "breakout" claim, one must overlook a few recent closes that were just marginally above the March 23 close of $17.90. + Rising earnings-per-share estimates: According to recent data from First Call, the consensus earnings estimate for 2005 is $1.75, revised upward from $1.65 90 days ago (and up from 2004 actual earnings of $1.32); and the consensus estimate for 2006 is $1.90, revised upward from $1.85 90 days ago. + Valuation: At 11.7 times next year's estimated earnings and a projected 5-year annualized earnings growth rate of 11.7%, the stock is attractively priced. + History of earnings surprises: This company has reported earnings 8c ahead of estimates in two of the past three quarters. + The company's industry group ("Medical - Ethical Drugs") is ranked #30 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. + The stock's 200-day moving average is rising, indicating a long-term uptrend. I chose to buy the stock in spite of the following negative factors: - Spotty recent sales growth: Here are the quarterly year-to-year sales growth rates from the last four quarters, in chronological order: +0%, +39%, -6%, and, most recently, for the quarter ended June 30, +5% to $217.4 million. - Good, but not great, recent earnings-per-share growth: Here are the quarterly EPS figures for the last eight quarters: Sep 04 vs Sep 03: 31c vs 24c Dec 04 vs Dec 03: 55c vs (68c) Mar 05 vs Mar 04: 7c vs 18c Jun 05 vs Jun 04: 33c vs 28c -KD, September 9, 2005
* 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 © 2005 Deen Capital Management, Inc. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||