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, Wednesday, November 28, 2007, I bought MA, first for client accounts, then for my personal accounts. MasterCard, Inc. offers transaction processing services for credit and debit cards, electronic cash, automated teller machines, and travelers checks. This stock is a component of the IBD 100 and the IBD New America Indexes. ("IBD" = "Investor's Business Daily") Here's why I bought this stock: + Market Timing: As I write this, we have a sold day-and-a-half rally underway. I see some extremely tentative signs that perhaps the market has turned. My response so far, however, is muted, as my indicators remain unanimously bearish. This buy is only a nibble, in the context of a low-risk, high-cash portfolio. + Financial stocks are leading today's rally. This is a financial services stock. + October breakout on earnings surprise: On October 31, the stock was up sharply on extremely heavy volume. This was a breakout to an all-time high from a four-month trading range. We are buying today near the high end of this stock's October 31 intraday range, which, in my view, means this is still a buy. That breakout was fueled by a huge earnings surprise (see 'History of earnings surprises' below). This stock was a "Ken's Pick" on October 31. + This stock held up quite well during the severe November correction. Indeed, it is now very near an all-time high. + Excellent recent sales growth. Here are the quarterly year-to-year sales growth rates from the last four quarters, in chronological order: +17%, +24%, +18%, and, most recently, for the quarter ended Sep 30, +20% to $1.08 billion. + Excellent recent earnings-per-share growth. Here are the quarterly EPS figures for the last eight quarters: + Sharply rising earnings-per-share estimates: According to recent data from First Call, the consensus earnings estimate for 2007 is $5.51, revised upward from $4.93 90 days ago (and up from 2006 actual earnings of $3.41); and the consensus estimate for 2008 is 6.84, revised upward from $5.98 90 days ago. + Valuation: At 28 times next year's estimated earnings and a projected 5-year annualized earnings growth rate of 19%, the stock is moderately priced. + History of earnings surprises: This company has reported earnings at least 10c above estimates in each of the past four quarters. Most recently, for the quarter ended Sep 30, earnings came in 38c above. + The company's industry group ("Financial - Misc") is ranked #35 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 28, 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. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||