Please read carefully our disclaimers at the end of this newsletter. Market Stance: BULLISH (since July 28, 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.
* The "Net buy price" is the total net purchase cost after commissions for all managed accounts divided by the total number of shares. Today, Tuesday, October 10, 2006, I bought ROG, first for client accounts, then for my personal accounts. Rogers Corp. manufactures and markets specialty materials and components for applications in the communications, computer, imaging, consumer, and transportation markets. The Company's products include elastomers, high frequency circuit materials, flexible circuit materials, molding materials, and composite materials. Rogers sells its products around the world. This stock is a component of the IBD 100, the IBD New America, and the S&P 500 Indices. ("IBD" = "Investor's Business Daily") Here's why I bought this stock: + News: This morning, before the open, the company raised its sales and earnings guidance for the quarter just ended. They now expect sales of $123 million (versus last year's $85.4 million and the First Call consensus of $102.5 million) and earnings of 87c to 89c per diluted share (last year 51c, First Call 75c). Final results will be reported October 26 after the close. + Breakout: The stock actually broke out yesterday from a 5-month trading range on heavy volume, but today the stock even more sharply on even heavier volume. + Excellent and accelerating recent sales growth. Here are the quarterly year-to-year sales growth rates from the last four quarters, in chronological order: -3%, +11%, +17%, and, most recently, for the quarter ended June 30, +24% to $104.8 million. The Sep 30 quarter, as cited above, should be at least 44% above the year-ago number. + Excellent recent earnings-per-share growth. Here are the quarterly EPS figures for the last eight quarters: Sep 05 vs Sep 04: 51c vs 36c Dec 05 vs Dec 04: 56c vs (4c) Mar 06 vs Mar 05: 74c vs 30c Jun 06 vs Jun 05: 75c vs 27c (And, as cited above, Sep 06 vs Sep 05 should be at least 87c vs 51c.) + Rising earnings-per-share estimates: According to recent data from First Call, the consensus earnings estimate for 2006 is $3.05, revised upward from $2.91 90 days ago (and up from 2005 actual earnings of $1.64); and the consensus estimate for 2007 is $3.42, revised upward from $3.28 90 days ago. + Valuation: At 20 times next year's estimated earnings and a projected 5-year annualized earnings growth rate of 20%, the stock is moderately priced. + History of earnings surprises: This company has reported earnings at least 6c above estimates in each of the past three quarters, not counting the quarter just ended, which the company is now saying should be at least 16c above. + The company's industry group ("Chemical - Plastics") is ranked #11 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, October 10, 2006 Sold Shire Pharma Group plc (SHPGY) -7.7% (after commissions)
* The net buy (sell) price is the total net cost (proceeds) after commissions for all managed accounts divided by the total number of shares. The stock is down sharply today, just one day after I bought it, and is poised to close below my hard stop-loss price, which I had set at $53.50. -KD, October 10, 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. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||