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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, Wednesday, August 27, 2008, I bought SAPE, first for client accounts, then for my personal accounts. Sapient Corp. provides integrated management consulting services, Internet commerce solutions, and systems implementation services. Here's why I bought this stock: + Breakout: This morning the stock is breaking out of an 8-month trading range to a new 46-month high on heavy volume. If the stock can close above $9.25 (and the intraday high so far is $9.33), that would be a breakout from a 46-month trading range to a new 7-year high. + Excellent recent sales growth. Here are the quarterly year-to-year sales growth rates from the last four quarters, in chronological order: +32%, +35%, +28%, and, most recently, for the quarter ended June 30, +28% to $170.3 million. + Excellent recent earnings-per-share growth. Here are the quarterly EPS figures for the last eight quarters:
Sep 07 vs Sep 06: 8c vs 7c Dec 07 vs Dec 06: 12c vs 6c Mar 08 vs Mar 07: 10c vs 7c Jun 08 vs Jun 07: 13c vs 7c + Strong and rising earnings-per-share estimates: According to recent data from First Call, the consensus earnings estimate for 2008 is 38c, revised upward from 33c 90 days ago (and up from 2007 actual earnings of 34c); and the consensus estimate for 2009 is 50c, revised upward from 45c 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 a penny above estimates in each of the past three quarters. Most recently, for the quarter ended June 30, they "beat the Street" by 3c. + 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 ("Computer - Tech Services") is ranked #35 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, Wednesday, August 27, 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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