Please read carefully our disclaimers at the end of this newsletter. Market Stance: BULLISH (since November 8, 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, Thursday, November 9, 2006, I bought GIGM, first for client accounts, then for my personal accounts. GigaMedia Ltd. provides online entertainment software and services. The Company, through its subsidiary, develops software for online entertainment services, including the global online gaming market. GigaMedia also operates a broadband ISP providing Internet access services to consumer and corporate subscribers in Taiwan. Here's why I bought this stock: + News: This morning, Thu Nov 9, before the open, the company announced results for the quarter ended Sep 30. Earnings from continuing operations came in at 11c per diluted share (vs 3c last year and First Call 7c). Revenue was up 118% to $24.2 million (First Call $17.1 million). + Near-Breakout: The stock is up on heavy volume this morning. Only two weeks in September stand between the present price and a 6-year high. + 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%, +82%, +92%, and, most recently, as cited above, +118%. + Excellent recent earnings-per-share growth. Here are the quarterly EPS figures for the last eight quarters: Dec 05 vs Dec 04: 5c vs 1c Mar 06 vs Mar 05: 6c vs 2c Jun 06 vs Jun 05: 22c vs 3c Sep 06 vs Sep 05: 11c vs 7c + Rising earnings-per-share estimates: According to recent data from First Call, the consensus earnings estimate for 2006 is 44c, revised upward from 25c 90 days ago (and up from 2005 actual earnings of 13c); and the consensus estimate for 2007 is 42c, revised upward from 36c 90 days ago. + Valuation: At 27 times next year's estimated earnings and a spectacular growth trajectory, the stock is moderately priced. (The 5-year projected earnings growth rate is not available.) + History of earnings surprises: This company has reported earnings at least a penny above estimates in each of the past three quarters, including the just-reported quarter cited above, which was 4c above. + 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 ("Internet Software") is ranked #41 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, November 9, 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. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||