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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 Kendle International Inc. (KNDL)
* Buy prices shown are net after commissions and fees. Today, Thursday, August 28, 2008, I bought KNDL, first for client accounts, then for my personal accounts. Kendle International Inc. provides a broad range of Phase I through IV clinical research and drug development services to the pharmaceutical and biotechnology industries. This stock is a component of the IBD 100 Index. ("IBD" = "Investor's Business Daily") Here's why I bought this stock: + Near breakout: The stock is up sharply today on heavy volume, and this move is almost but not quite a breakout. Last December 26, the stock closed at $50.80, and then on January 16, it closed at $50.77. If we could ignore those two points on the chart, then today's move would be a breakout from an 8-month trading range to a new 10-year high. We're just pennies away. + Volume spike: In the final minutes of today's regular trading session, volume is about 2.7 times average. + Excellent recent sales growth. Here are the quarterly year-to-year sales growth rates from the last four quarters, in chronological order: +47%, +31%, +20%, and, most recently, for the quarter ended June 30, +27% to $177.4 million. + Excellent recent earnings-per-share growth. Here are the quarterly EPS figures for the last eight quarters:
Sep 07 vs Sep 06: 48c vs 33c Dec 07 vs Dec 06: 47c vs 18c Mar 08 vs Mar 07: 38c vs 28c Jun 08 vs Jun 07: 52c vs 29c + Strong and rising earnings-per-share estimates: According to recent data from First Call, the consensus earnings estimate for 2008 is $2.03, revised upward from $1.91 90 days ago (and up from 2007 actual earnings of $1.52); and the consensus estimate for 2009 is $2.50, revised upward from $2.40 90 days ago. + Valuation: At 20 times next year's estimated earnings and a projected 5-year annualized earnings growth rate of 25%, the stock is attractively priced. + History of earnings surprises: For the most recent quarter ended June 30, earnings came in 6c above estimates. (This followed two quarters of disappointing the Street.) + The company's industry group ("Medical/Dental Services") 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 rising sharply over recent weeks and months. + The stock's 200-day moving average is rising, indicating a long-term uptrend. -KD, Thursday, August 28, 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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