Please read carefully our disclaimers at the end of this newsletter. Market Stance: BULLISH (since March 17, 2006)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 Casual Male Retail Group, Inc. (CMRG)
* 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, May 5, 2006, I bought CMRG, first for client accounts, then for my personal accounts. Casual Male Retail Group Inc. retails men's big and tall apparel through store locations throughout the United States, Canada, and the United Kingdom. The Company also has electronic commerce and catalog operations. Here's why I bought this stock: + News: Yesterday, Thu May 4, before the open, the company announced sales for the quarter ended April 29. Same-store sales were up 5.4%. Total sales were up 5.7% to $102.8 million. + A "true surprise"*: For six weeks prior to the news, the stock was trending lower. Then, yesterday, the stock soared 12% on more than 8x average 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: The price movement yesterday represents a breakout from a two-year trading range. + Yesterday, 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 . + Recent sales growth. Here are the quarterly year-to-year sales growth rates from the last four quarters, in chronological order: +14%, +26%, +10%, and, as cited above, +6%. + Recent earnings-per-share growth. Here are the quarterly EPS figures for the last eight quarters: Apr 05 vs Apr 04: (5c) vs (10c) Jul 05 vs Jul 04: 6c vs (1c) Oct 05 vs Oct 04: (8c) vs (10c) Jan 06 vs Jan 05: 33c vs 23c + Solid earnings-per-share estimates: According to recent data from First Call, the consensus earnings estimate for FY 07 (Jan) is 38c, revised upward from 36c 90 days ago (and up from FY 06 actual earnings of 25c); and the consensus estimate for FY 08 is 51c, unchanged from 90 days ago. + Valuation: At 20 times next year's estimated earnings and a projected 5-year annualized earnings growth rate of 23%, the stock is attractively priced. Earnings have been in-line with estimates for each of the past three quarters. + 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 ("Retail - Clothing/Shoe") is ranked #29 for relative strength out of 197 industry groups tracked by Investor's Business Daily. This ranking changes daily, and it has been generally falling over recent weeks and months. -KD, May 5, 2006
* 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 © 2006 Deen Capital Management, Inc. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||