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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. Bought LDK Solar Co. Ltd. (LDK)
* Buy prices shown are net after commissions and fees. Today, Tuesday, August 26, 2008, I bought LDK, first for client accounts, then for my personal accounts. LDK Solar Company Ltd. manufactures multi-crystalline solar wafers. They Company sell them globally to manufacturers of photovoltaic products including solar cells and solar modules. Here's why I bought this stock: + News: Yesterday, before the open, the company said it expects 2009 revenue between $2.8 and $3 billion. The Street was looking for $2.4 billion. + Breakout: Also yesterday, the stock broke out of a 12-week trading range to a new 8-month high on more than double average daily volume. + Technical: There's been a pickup in over the past two weeks, and most of this new volume is on the buy side. + The stock is down slightly this morning, which I suspect offers a good entry point. + Explosive recent sales growth. Here are the quarterly year-to-year sales growth rates from the last four quarters, in chronological order: +405%, +212%, +218%, and, most recently, for the quarter ended June 30, +346% to $441.7 million. + Excellent recent earnings-per-share growth. Here are the quarterly EPS figures for the last eight quarters:
Sep 07 vs Sep 06: $0.37 vs $0.05 Dec 07 vs Dec 06: $0.44 vs $0.23 Mar 08 vs Mar 07: $0.45 vs $0.23 Jun 08 vs Jun 07: $1.29 vs $0.27 + Strong and rising earnings-per-share estimates: According to recent data from First Call, the consensus earnings estimate for 2008 is $2.76, revised upward from $1.67 90 days ago (and up from 2007 actual earnings of $1.31); and the consensus estimate for 2009 is $4.39, revised upward from $3.73 90 days ago. + Valuation: At 11 times next year's estimated earnings and a projected 5-year annualized earnings growth rate of 53%, the stock is very attractively priced. + History of earnings surprises: This company has reported earnings-per-share at least 3c above estimates in each of the past three quarters. Most recently, for the quarter ended June 30, they "beat the Street" by 88c. + 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 ("Energy - Other") is ranked #14 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, Tuesday, August 26, 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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