Please read carefully our disclaimers at the end of this newsletter. Market Stance: BULLISH (since December 21, 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 TradeStation Group Inc. (TRAD)
* The "Net buy price" is the total net purchase cost after commissions for all managed accounts divided by the total number of shares. Today, Monday, December 24, 2007, I bought TRAD, first for client accounts, then for my personal accounts. TradeStation Group, Inc., through its subsidiaries, provides brokerage and subscription services. They is a direct-access brokerage firm serving traders and certain institutional trader markets. TradeStation also provides strategy trading software tools that generate real-time buy and sell alerts based upon the subscribers' programmed strategies. Here's why I bought this stock: + Breakout: Last Friday, Dec 21, the stock jumped $1.12 to $14.48 on heavy volume, more than 3x average. This was a breakout from an eight-and-a-half month trading range to a new 52-week high. This chart pattern looks especially bullish, and is a major reason behind my decision to buy. + Excellent recent sales growth. Here are the quarterly year-to-year sales growth rates from the last four quarters, in chronological order: +26%, +20%, +10%, and, most recently, for the quarter ended Sep 30, +24% to $41.6 million. + Excellent recent earnings-per-share growth. Here are the quarterly EPS figures for the last eight quarters: Dec 06 vs Dec 05: 19c vs 16c Mar 07 vs Mar 06: 18c vs 15c Jun 07 vs Jun 06: 18c vs 17c Sep 07 vs Sep 06: 22c vs 17c + Valuation: At 16 times next year's estimated earnings, the stock is attractively priced. (The 5-year projected earnings growth rate, to which I usually compare this number, is not available.) + History of earnings surprises: This company has reported earnings at least a penny above estimates in two of the past four quarters. (The other two were in line.) Most recently, for the quarter ended Sep 30, earnings came in 2c above consensus. + 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: - Next year's earnings-per-share estimates: According to recent data from First Call, the consensus earnings estimate for 2007 is 79c, revised upward from 77c 90 days ago (and up from 2006 actual earnings of 67c); and the consensus estimate for 2008 is 89c, revised downward from 90c 90 days ago. - The company's industry group ("Internet - ECommerce") is ranked #23 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, December 24, 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. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||