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.
* The "Net buy price" is the total net purchase cost after commissions for all managed accounts divided by the total number of shares. Today, Friday, November 9, 2007, I bought AMED, first for client accounts, then for my personal accounts. Amedisys, Inc. is a multi-regional provider of alternate-site health care services. They offer home health care nursing, home infusion therapy, and ambulatory surgery centers. They operate offices within a network of subsidiaries in the southern and southeastern United States. This stock is a component of the S&P 600 Index. Here's why I bought this stock: + Yes, I just sold this yesterday. However, it is not a tech stock, and the character of the present correction changed yesterday from financials-centered to tech-centered. This one was (and still is) a particularly strong buy, and the chart pattern still looks bullish. Also, I notice that just over the past week, earnings estimates for 2007 have risen from $2.21 to $2.29 a share, and for 2008 from $2.34 to $2.50. We're buying at a lower price this time, and there is a natural and very tight stop-loss point near $40. This is the pre-breakout ceiling, which I expect should now be a floor. + As mentioned in my original Buy Alert of October 30 ( http://www.deencapital.com/newslett/2007/071030.259.html ), there was a strong heavy-volume breakout that day driven by a strong earnings surprise. This was a true surprise. * "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). + On October 30, the stock met the stringent technical buy criteria outlined in my Research Update of June 26, 2004: http://www.deencapital.com/newslett/2004/040626.129.html#3 . + Excellent and accelerating recent sales growth. Here are the quarterly year-to-year sales growth rates from the last four quarters, in chronological order: +21%, +21%, +27%, and, most recently, +32%. + Excellent recent earnings-per-share growth. Here are the quarterly EPS figures for the last eight quarters: Dec 06 vs Dec 05: 51c vs 34c Mar 07 vs Mar 06: 51c vs 36c Jun 07 vs Jun 06: 57c vs 42c Sep 07 vs Sep 06: 61c vs 48c + Valuation: At 17 times next year's estimated earnings and a projected 5-year annualized earnings growth rate of 18%, the stock is attractively priced. + History of earnings surprises: This company has reported earnings at least a penny above estimates in four of the past five quarters, including the just-reported quarter cited above, which was 5c above estimates. + The company's industry group ("Medical - Outpatient / Home Care") is ranked #89 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 9, 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. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||