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Please read carefully our disclaimers at the end of this newsletter. Market Stance: BULLISH (since July 17, 2008) Contents
Performance
* An average of managed accounts, net after all commissions and fees. Click here for more performance data. Click here for information on managed accounts.
* Buy prices shown are net after commissions and fees. Today, Friday, August 22, 2008, I bought APH, first for client accounts, then for my personal accounts. Amphenol Corp. makes electrical, electronic and fiber optic connectors, interconnect systems, and coaxial and flat-ribbon cable. Their products are used in a variety of industries, including telephone, wireless, and data communications systems, cable television systems, and commercial and military aerospace electronics. This stock is a component of the IBD 100, the IBD New America, and the S&P 400 Midcap Indexes. ("IBD" = "Investor's Business Daily") Here's why I bought this stock: + Technical: Since a July 7 low (close $44.39), the stock has established a pattern of higher highs and higher lows. On July 17, the stock soared 15% on volume that set a 12-month record, fueled by an earnings surprise. The price has mostly stayed within that July 17 intraday range since then, with the exception of a few days marginally above that range earlier this month. + The stock is up in early trading this morning after 4 consecutive down days. I suspect today begins a new leg up for this stock, and, as such, an excellent entry point. Those 4 down days brought the price down from $51.95 on August 15 to $48.90 yesterday. We bought this morning at a price easily within The July 17 range of $46.95 to $51.39. + The stock is trading well above its rising 200-day moving average, indicating a long-term uptrend. + Excellent and accelerating recent sales growth. Here are the quarterly year-to-year sales growth rates from the last four quarters, in chronological order: +15%, +18%, +18%, and, most recently, for the quarter ended June 30, +23% to $846.8 million. + Excellent recent earnings-per-share growth. Here are the quarterly EPS figures for the last eight quarters:
Sep 07 vs Sep 06: 50c vs 39c Dec 07 vs Dec 06: 55c vs 42c Mar 08 vs Mar 07: 54c vs 42c Jun 08 vs Jun 07: 61c vs 46c + Strong and rising earnings-per-share estimates: According to recent data from First Call, the consensus earnings estimate for 2008 is $2.38, revised upward from $2.33 90 days ago (and up from 2007 actual earnings of $1.93); and the consensus estimate for 2009 is $2.65, revised upward from $2.59 90 days ago. + Valuation: At 18.5 times next year's estimated earnings and a projected 5-year annualized earnings growth rate of 20%, the stock is attractively priced. + History of earnings surprises: This company has reported earnings-per-share at least 2c above estimates in each of the past four quarters, including the most recent quarter ended June 30, which "beat the Street" by 3c. + The company's industry group ("Elec - Component / Connector") is ranked #43 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. -KD, Friday, August 22, 2008 Model Portfolio
* Buy prices shown are net after commissions and fees. ** 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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