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Please read carefully our disclaimers at the end of this newsletter. Market Stance: BEARISH (since February 29, 2008) 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, Tuesday, March 18, 2008, I bought KEX, first for client accounts, then for my personal accounts. Kirby Corp. operates a fleet of inland tank barges. They transport industrial chemicals, refined petroleum products, black oil products, and agricultural chemicals. Kirby also overhauls and services diesel engines employed in marine, power generation, and rail applications. This stock is a component of the S&P 600 SmallCap Index. Here's why I bought this stock: + News: Yesterday, after the close, the company made an earnings pre- announcement. They now project earnings for the current quarter, ending March 31, will exceed 66c per share. The Street (First Call) was looking for 60c. + A "true surprise"*: For 3-4 weeks prior to the news, the stock has been trending lower. It closed yesterday at a six-week low. Then, this morning, the stock is soaring on heavy volume. * "True surprise" is my term to describe a company news item that ignites heavy buying and that was not preceded by a short-term run-up in the stock price (i.e. not preceded by rumor). + Near Breakout: A close above $49.93 would be a breakout from a 3-month trading range to a new all-time high. The stock is very close to that breakout point now. My guess is we'll see a breakout sometime this week. + Excellent recent sales growth. Here are the quarterly year-to-year sales growth rates from the last four quarters, in chronological order: +22%, +18%, +14%, and, most recently, for the quarter ended Dec 31, +22% to $307.9 million. + Excellent recent earnings-per-share growth. Here are the quarterly EPS figures for the last eight quarters:
Mar 07 vs Mar 06: 46c vs 42c Jun 07 vs Jun 06: 56c vs 44c Sep 07 vs Sep 06: 64c vs 48c Dec 07 vs Dec 06: 64c vs 44c + Rising earnings-per-share estimates: According to recent data from First Call, the consensus earnings estimate for 2008 is $2.65, revised upward from $2.57 90 days ago (and up from 2007 actual earnings of $2.29); and the consensus estimate for 2009 is $2.99, revised upward from $2.79 90 days ago. + Valuation: At 17 times next year's estimated earnings and a projected 5-year annualized earnings growth rate of 18%, the stock is attractively priced. + History of earnings surprises: This company has reported earnings at least a penny above estimates in each of the past four quarters. Most recently, for the quarter ended Dec 31, they beat by a penny. + 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 factor: - The company's industry group ("Transportation - Ship") is ranked #124 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, March 18, 2008
* 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.
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