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. Bought Comtech Group, Inc. (COGO)
* 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 31, 2006, I bought COGO, first for client accounts, then for my personal accounts. Based in China, Comtech Group Inc. provides design solutions to telecommunications equipment, mobile device, and consumer electronic manufacturers in China. Here's why I bought this stock: + News: This morning, before the open, the company announced details of a partnership with Microsoft, "which will allow the company to dramatically expand its capacity to provide solutions for the fast growing digital media market". + Breakout: In response, the stock is up sharply today on heavy volume. This is a breakout from a 5-month trading range. + Excellent recent sales growth. Here are the quarterly year-to-year sales growth rates from the last four quarters, in chronological order: +49%, +73%, +63%, and, most recently, for the quarter ended Jun 30, +66% to $41.6 million. + Excellent recent earnings-per-share growth. Here are the quarterly EPS figures for the last eight quarters: Sep 05 vs Sep 04: 8c vs 7c Dec 05 vs Dec 04: 11c vs 9c Mar 06 vs Mar 05: 11c vs 7c Jun 06 vs Jun 05: 12c vs 10c + Strong earnings-per-share estimates: According to recent data from First Call, the consensus earnings estimate for 2006 is 52c, unchanged from 90 days ago (and up from 2005 actual earnings of 36c); and the consensus estimate for 2007 is 69c, revised upward from 68c 90 days ago. + Valuation: At 24 times next year's estimated earnings and a projected 5-year annualized earnings growth rate of 30%, the stock is attractively priced. + History of earnings surprises: This company has reported earnings at least a penny above estimates in each of the past three of the past four quarters. + The company's industry group ("Telecom - Wireless Equip") is ranked #26 for relative strength out of 197 industry groups tracked by Investor's Business Daily. This ranking changes daily, and it has been generally stable to very slightly falling over recent weeks and months. + The stock's 200-day moving average is rising, indicating a long-term uptrend. -KD, October 31, 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. The Deen's List Copyright © 2006 Deen Capital Management, Inc. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||