Please read carefully our disclaimers at the end of this newsletter. Market Stance: BULLISH (since October 31, 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. Bought Multi-Fineline Electronix Inc. (MFLX)
* 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, November 7, 2005, I bought MFLX, first for client accounts, then for my personal accounts. Multi-Fineline Electronix, Inc. provides flexible printed circuit and component assembly solutions to the electronics industry. The Company's services include design and application engineering, prototyping and high-volume manufacturing, and turnkey component assembly and testing. Here's why I bought this stock: + News: On Friday after the close, the company announced results for the quarter ended Sep 30. Earnings came in at 44c per diluted share (vs 37c last year and First Call 39c). Revenue was up 55% to $110.9 million (First Call $100.5 million). + Enthusiastic market reaction: At the time I decided to buy, about an hour and a half before the close, the stock was up about 16% on about 9x average daily volume. + Breakout: The price movement today represents a breakout from a 5-week trading range. + Excellent recent sales growth: Here are the quarterly year-to-year sales growth rates from the last four quarters, in chronological order: +58%, +37%, +18%, and, most recently, as cited above, +55%. + Mostly excellent recent earnings-per-share growth: Here are the quarterly EPS figures for the last eight quarters: Dec 04 vs Dec 03: 38c vs 12c Mar 05 vs Mar 04: 32c vs 30c Jun 05 vs Jun 04: 35c vs 44c Sep 05 vs Sep 04: 44c vs 37c + Rising earnings-per-share estimates: According to recent data from First Call, the consensus earnings estimate for FY 06 (Sep) is $1.62, revised upward from $1.50 90 days ago, and better than FY 05 earnings of $1.51 (just announced). For 2007, Zacks shows a new consensus estimate of $2.14. + Valuation: At 16 times next year's estimated earnings and a projected 5-year annualized earnings growth rate of 15%, the stock is attractively priced. + History of earnings surprises: This company has reported earnings at least 3c ahead of estimates in each of the past five quarters, including the just-reported quarter cited above, which was 5c ahead. + The company's industry group ("Electronics - Components/Connectors") is ranked #107 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. -KD, November 7, 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. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||