Please read carefully our disclaimers at the end of this newsletter. Market Stance: BEARISH (since November 1, 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. Bought Bristow Group Inc. (BRS)
* 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 6, 2007, I bought BRS, first for client accounts, then for my personal accounts. Bristow Group, Inc. provides helicopter transportation services to the offshore oil and gas industry around the world. Here's why I bought this stock: + News: Yesterday, after the close, the company announced results for the quarter ended Sep 30. Earnings came in at $1.12 per diluted share (vs 79c last year and First Call consensus 76c). Revenue was up 22% to $273.3 million (First Call $257.5 million). + A "true surprise"*: For three weeks prior to the news, the stock was trading in a tight sideways pattern. Then, today, the stock is soaring on extremely heavy 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 today represents a breakout from a 16-week trading range to a new 10-year (at least) 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: +16%, +14%, +11%, and, most recently, as cited above, +22%. + Good recent earnings-per-share growth. Here are the quarterly EPS figures for the last eight quarters: Dec 06 vs Dec 05: $0.57 vs $0.71 Mar 07 vs Mar 06: $0.91 vs $0.75 Jun 07 vs Jun 06: $0.75 vs $0.73 Sep 07 vs Sep 06: $1.12 vs $0.79 + Valuation: At 15 times next year's estimated earnings, the stock is moderately priced. (The projected 5-year earnings growth rate was not available.) + History of earnings surprises: This company has reported earnings at least a penny above estimates in three of the past five quarters, including the just-reported quarter cited above, which was 36c above. + The company's industry group ("Oil&Gas - Field Services") is ranked #23 for relative strength out of 197 industry groups tracked by Investor's Business Daily. This ranking changes daily, and it has been generally fairly stable over recent weeks and months. + 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: - Falling earnings-per-share estimates: According to recent data from First Call, the consensus earnings estimate for FY 08 (ends March 31) is $3.10, revised downward from $3.28 90 days ago (but up from FY 07 actual earnings of $2.97); and the consensus estimate for FY 09 is $3.73, revised downward from $3.87 90 days ago. -KD, November 6, 2007 Sold Sierra Wireless Inc. (SWIR) +1.5% (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 still like this stock, but I chose to swap out of it and into BRS because I like BRS even better. -KD, November 6, 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. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||