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.
* 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, December 12, 2007, I bought OTEX, first for client accounts, then for my personal accounts. Open Text Corp. provides intranet, extranet, and corporate portal solutions to organizations located throughout the world. The Company's flagship product, Livelink is an off-the-shelf, enterprise scalable, collaborative application allowing companies to leverage their information and resources through intranets. This stock is a component of the IBD 100 Index. ("IBD" = "Investor's Business Daily") Here's why I bought this stock: + Market considerations: Yes, I just sold this stock yesterday, along with four others, as a risk management move, because yesterday's huge late-day selloff raised serious concern in my mind that the big downtrend of November may be resuming. However, I am surprised this morning, a couple of hours after the opening bell, to find that my technical indicators have fully recovered already from yesterday's damage. This is a good sign, and, in view of this development, I'm willing to take on a little more risk. + Our buy price is slightly better this time than last time. + Technical: The stock has been continuously trading above its rising 50-day moving average since August 31. Yesterday, it very nearly kissed that line before rebounding this morning. I view a bounce like this off of a rising 50-day moving average as a technical buy signal. + Excellent recent sales growth. Here are the quarterly year-to-year sales growth rates from the last four quarters, in chronological order: +47%, +55%, +66%, and, most recently, for the quarter ended Sep 30, +62% to $164.0 million. + Excellent recent earnings-per-share growth. Here are the quarterly EPS figures for the last eight quarters: Dec 06 vs Dec 05: 35c vs 31c Mar 07 vs Mar 06: 34c vs 27c Jun 07 vs Jun 06: 52c vs 31c Sep 07 vs Sep 06: 43c vs 24c + Rising earnings-per-share estimates: According to recent data from First Call, the consensus earnings estimate for FY 08 (ends June 30) is $1.88, revised upward from $1.78 90 days ago (and up from FY 07 actual earnings of $1.46); and the consensus estimate for FY 09 is $2.13, revised upward from $2.01 90 days ago. + Valuation: At 15 times next year's estimated earnings and a projected 5-year annualized earnings growth rate of 18.5%, the stock is very attractively priced. + History of earnings surprises: This company has reported earnings at least 3c above estimates in each of the past four quarters. Most recently, for the quarter ended Sep 30, earnings came in 7c above consensus. + The company's industry group ("Computer Software - Enterprise") is ranked #8 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, December 12, 2007
* Net buy prices include commissions. ** 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. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||