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 Air Methods Corp. (AIRM)
* 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, November 11, 2005, I bought AIRM, first for client accounts, then for my personal accounts. Air Methods Corp. provides aeromedical emergency transport services and systems throughout North America. The Company provides transportation services to hospitals throughout the U.S. In addition, Air Methods designs, manufactures, and installs medical aircraft interiors and other aerospace products. Here's why I bought this stock: + News: Two days ago, on Wed Nov 9, before the open, the company announced results for the quarter ended Sep 30. Earnings came in at 47c per diluted share (vs 13c last year). Revenue was up 31% to $90.5 million. Note: This micro-cap stock has no Wall Street following. It's too small. There are no estimates, no earnings surprise data, etc. + A "true surprise"*: Prior to the news, the stock had been locked in a tight trading range since early September. Then, on Wednesday, the stock soared 16% on 14x average daily volume. * "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: Wednesday's action was a breakout from an eight-week trading range. + On Wednesday, the stock met the stringent technical buy criteria outlined in my Research Update of June 26, 2004: http://www.deencapital.com/newslett/2004/040626.129.html#3 . + Excellent and accelerating recent sales growth: Here are the quarterly year-to-year sales growth rates from the last four quarters, in chronological order: +4%, +11%, +18%, and, most recently, as cited above, +31%. + The last two quarter have exhibited explosive earnings-per-share growth: Here are the quarterly EPS figures for the last eight quarters: Dec 04 vs Dec 03: (2c) vs 15c Mar 05 vs Mar 04: (4c) vs (5c) Jun 05 vs Jun 04: 45c vs 22c Sep 05 vs Sep 04: 47c vs 13c + Valuation: At 17 times trailing 12-month earnings, the stock is attractively priced. + 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 factor: - The company's industry group ("Medical/Dental Services") 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 falling (just slightly) over recent weeks and months. -KD, November 11, 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. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||