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. Bought Zoll Medical Corp. (ZOLL)
* 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, November 21, 2006, I bought ZOLL, first for client accounts, then for my personal accounts. Zoll Medical Corp. designs, manufactures, and markets an integrated line of proprietary, non-invasive resuscitation devices and disposable electrodes. The Company's products are used by health care professionals to provide pacing and defibrillation. Zoll also designs and markets software that automates collection and management of data for emergency medical service providers. Here's why I bought this stock: + News: Last Thursday, Nov 16, before the open, the company announced results for the quarter ended Oct 1. Earnings came in at 55c per diluted share (vs 23c last year and First Call 37c). Revenue was up 27% to $72.3 million. + Huge market reaction: The stock soared 28% on more than 14x average daily volume last Thursday. I bought today at a price below Thursday's close, thanks to some subsequent profit-taking. + The stock is at a multi-year high, having recently broken out of a 6-year range. + Excellent recent sales growth. Here are the quarterly year-to-year sales growth rates from the last four quarters, in chronological order: +10%, +8%, +26%, and, most recently, as cited above, +27% to $72.3 million. + Excellent recent earnings-per-share growth. Here are the quarterly EPS figures for the last eight quarters: Dec 05 vs Dec 04: 12c vs (6c) Mar 06 vs Mar 05: 21c vs 2c Jun 06 vs Jun 05: 26c vs 1c Sep 06 vs Sep 05: 55c vs 23c + Rising earnings-per-share estimates: According to recent data from First Call, the consensus earnings estimate for FY 07 (Sep) is $1.44, revised upward from $1.30 90 days ago (and up from FY 06 actual earnings of $1.15); and the consensus estimate for FY 08 is $1.82, revised upward from $1.51 90 days ago. + Valuation: At 28 times next year's estimated earnings and a projected 5-year annualized earnings growth rate of 20%, the stock price is at least within reason. + History of earnings surprises: This company has reported earnings at least 4c above estimates in each of the past three quarters, including the just-reported quarter cited above, which was 18c above. + The company's industry group ("Medical - Systems/Equip") is ranked #51 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, November 21, 2006 Sold Metretek Technologies, Inc. (MEK) -10.6% (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. I sold MEK shortly after the opening bell this morning, because it closed yesterday below my hard stop-loss price of $13.75. -KD, November 21, 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. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||