Please read carefully our disclaimers at the end of this newsletter. Market Stance: BULLISH (since January 11, 2007)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, January 16, 2007, I bought HDB, first for client accounts, then for my personal accounts. HDFC Bank Ltd. is a financial institution based in India. They have a network of 535 branches in 228 Indian cities. They are India's third-largest lender by market value. This stock is a component of the IBD 100 Index. ("IBD" = "Investor's Business Daily") Here's why I bought this stock: + News: Last Thursday, Jan 11, before the open, the company announced results for the quarter ended Dec 31. Earnings came in at 63c per diluted share (vs 45c last year). Revenue was up 48% to $484.1 million. + A "true surprise"*: Prior to the news, the stock was trading near an 8-week low. Then, on Friday, the stock soared 7% on more than twice average daily 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 on Friday was a breakout from a 8-week trading range. + Excellent recent revenue growth. Here are the quarterly year-to-year revenue growth rates from the last four quarters, in chronological order: +52%, +52%, +52%, and, most recently, as cited above, +48%. + Excellent recent earnings-per-share growth. Here are the quarterly EPS figures for the last eight quarters: Mar 06 vs Mar 05: 53c vs 43c Jun 06 vs Jun 05: 49c vs 39c Sep 06 vs Sep 05: 54c vs 41c Dec 06 vs Dec 05: 63c vs 45c + Rising earnings-per-share estimates: According to recent data from First Call, the consensus earnings estimate for FY 07 (Mar) is $2.46, revised upward from $2.37 90 days ago (and up from FY 06 actual earnings of $1.78); and the consensus estimate for FY 08 is $3.20, revised upward from $3.06 90 days ago. + Valuation: At 25 times next year's estimated earnings and a projected 5-year annualized earnings growth rate of 30%, the stock is attractively priced. Earning surprise history data was not available. + The company's industry group ("Banks - Foreign") is ranked #28 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, January 16, 2007
* 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 © 2007 Deen Capital Management, Inc. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||