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. Bought Quicksilver Res Inc. (KWK)
* 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, December 20, 2007, I bought KWK, first for client accounts, then for my personal accounts. Quicksilver Resources Inc. is involved in the acquisition, development, exploration, production, and sale of natural gas and crude oil. They also conduct operations in the gathering, processing, and transmission of natural gas. Quicksilver owns properties in Michigan, Wyoming, and Montana in the U.S., and in Canada. This stock is a component of the S&P 400 Midcap Index. Here's why I bought this stock: + One more nibble. Only 4% of account values. We're still about 2/3 in cash, which is still very conservative. My indicators are still unanimously bearish but improving. I'm still emphasizing cash. + Near-Breakout: This stock was up sharply two days ago, Tue Dec 18, on very heavy volume, almost 5 times average. Were it not for two days in earlier November, when the stock closed fractionally higher, this would be a breakout from a six-week trading range to a 10-year high. + Excellent and accelerating recent sales growth. Here are the quarterly year-to-year sales growth rates from the last four quarters, in chronological order: -1%, +17%, +52%, and, most recently, for the quarter ended Sep 30, +60% to $159.2 million. + Sharp turnaround in recent earnings-per-share growth. Here are the quarterly EPS figures for the last eight quarters: Dec 06 vs Dec 05: 24c vs 43c Mar 07 vs Mar 06: 28c vs 34c Jun 07 vs Jun 06: 38c vs 25c Sep 07 vs Sep 06: 39c vs 28c + Rising earnings-per-share estimates: According to recent data from First Call, the consensus earnings estimate for 2007 is $1.52, revised upward from $1.33 90 days ago (and up from 2006 actual earnings of $1.11); and the consensus estimate for 2008 is $2.06, revised upward from $1.52 90 days ago. Just yesterday, First Call raised the 2008 consensus from $1.84 to $2.04, and they raised it again today to $2.06 + Valuation: At 28 times next year's estimated earnings and a projected 5-year annualized earnings growth rate of 21%, the stock is moderately priced. + History of earnings surprises: Earnings for the quarter ended Sep 30 came in 3c above consensus; for the quarter before that, ended Jun 30, earnings came in 7c above. + The company's industry group ("Oil&Gas - U.S. Exploration & Production") is ranked #27 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 20, 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. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||