Please read carefully our disclaimers at the end of this newsletter. Market Stance: BULLISH (since November 28, 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 Sigma Designs Inc. (SIGM)
* The "Net buy price" is the total net purchase cost after commissions for all managed accounts divided by the total number of shares. Today, Thursday, November 29, 2007, I bought SIGM, first for client accounts, then for my personal accounts. Sigma Designs, Inc. designs, manufactures, and markets multimedia products for use with personal computers. Here's why I bought this stock: + News: Yesterday, Nov 28, after the close, the company announced results for the quarter ended Oct 31. Non-GAAP earnings came in at 79c per diluted share (vs 19c last year and First Call consensus 54c). Revenue was up 164% to $66.2 million (First Call $51.6 million). + Breakout: The stock is up sharply today on very heavy volume. This represents a breakout from a five-week trading range to a 10-year high. + Explosive recent sales growth. Here are the quarterly year-to-year sales growth rates from the last four quarters, in chronological order: +198%, +143%, +111%, and, most recently, as cited above, +164%. + Explosive recent earnings-per-share growth. Here are the quarterly EPS figures for the last eight quarters: Jan 07 vs Jan 06: 27c vs (3c) Apr 07 vs Apr 06: 32c vs 1c Jul 07 vs Jul 06: 48c vs 9c Oct 07 vs Oct 06: 79c vs 19c + Sharply rising earnings-per-share estimates: According to recent data from First Call, the consensus earnings estimate for FY 08 (ends Jan 31) is $1.96, revised upward from $1.42 90 days ago (and up from FY 07 actual earnings of 56c); and the consensus estimate for FY 09 is $2.08, revised upward from $1.54 90 days ago. + Valuation: At 32 times next year's estimated earnings and a projected 5-year annualized earnings growth rate of 27%, the stock is moderately priced. + History of earnings surprises: This company has reported earnings at least 3c above estimates in each of the past four quarters, including the just-reported quarter cited above, which was 25c above. + 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 factors: - This stock is now up five days in a row. This suggests it is due for a pullback over the next few days. If it does pull back, I may buy more. - The company's industry group ("Elec - Semiconductor Mfg") is ranked #57 for relative strength out of 197 industry groups tracked by Investor's Business Daily. This ranking changes daily, and it has been generally falling over recent weeks and months. -KD, November 29, 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. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||