Please read carefully our disclaimers at the end of this newsletter. Market Stance: BEARISH (since December 14, 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 19, 2007, I bought AAPL, first for client accounts, then for my personal accounts. Apple Inc. is the well-known computer and consumer electronics manufacturer. Their products include desktop computers, notebook computers, operating system, software applications, music players, and an online music store. This stock is a component of the IBD 100, the S&P 500, the S&P 100, and the NASDAQ 100 Indexes. ("IBD" = "Investor's Business Daily") Here's why I bought this stock: + Yes, I'm still bearish. Even after this buy, we're still in a high-cash, low-risk posture. This is just a nibble -- a very small position (about 4% of account values, versus more typical 5% to 9%), in deference to my still very bearish indicators. + This stock and Google are, arguably, the two highest-quality names in the technology sector, and perhaps in the entire market. + Technical buy signal: The stock is today bouncing off of its rising 50-day moving average. It set a new all-time closing high a week ago Monday. It has pulled back only modestly since then in a very weak market. + Excellent and accelerating recent sales growth. Here are the quarterly year-to-year sales growth rates from the last four quarters, in chronological order: +24%, +21%, +24%, and, most recently, for the quarter ended Sep 30, +29% to $6.217 billion. + Excellent recent earnings-per-share growth. Here are the quarterly EPS figures for the last eight quarters: Dec 06 vs Dec 05: $1.14 vs $0.65 Mar 07 vs Mar 06: $0.87 vs $0.47 Jun 07 vs Jun 06: $0.92 vs $0.54 Sep 07 vs Sep 06: $1.01 vs $0.62 + Rising earnings-per-share estimates: According to recent data from First Call, the consensus earnings estimate for FY 08 (ends Sep 30) is $5.06, revised upward from $4.42 90 days ago (and up from FY 07 actual earnings of $3.93); and the consensus estimate for FY 09 is $6.34, revised upward from $5.46 90 days ago. + Valuation: At 29 times next year's estimated earnings and a projected 5-year annualized earnings growth rate of 22%, the stock is moderately priced. + History of earnings surprises: This company has reported earnings at least 15c above estimates in each of the past four quarters. Most recently, for the quarter ended Sep 30, earnings came in 15c above consensus. + The company's industry group ("Computer Manufacturers") is ranked #10 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 19, 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. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||