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Please read carefully our disclaimers at the end of this newsletter. Market Stance: BEARISH (since September 4, 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 Questcor Pharmaceuticals, Inc. (QCOR)
* Buy prices shown are net after commissions and fees. Today, Thursday, September 11, 2008, I bought QCOR, first for client accounts, then for my personal accounts. Questcor Pharmaceuticals, Inc. develops and commercializes central nervous system-focused therapeutics. Their primary product is a natural source adrenocorticotropic hormone indicated for the treatment of acute exacerbations of multiple sclerosis, as well as a number of other conditions. Here's why I bought this stock: + Market timing: The market is acting well in the face of very bad news surrounding financial giants Lehman Brothers and Washington Mutual (their viability is in grave doubt). I remain bearish, but there is some possibility that we could be making an important bottom here. + Breakout: A close above $6.15 would be a breakout from a nine-and-a-half month trading range to a new 10-year high. The intraday high today (so far) is $6.24. + Volume spike: As I write this, about 40 minutes before the close, volume is more than 4 times average. + Explosive recent sales growth. Here are the quarterly year-to-year sales growth rates from the last four quarters, in chronological order: +266%, +697%, +417%, and, most recently, for the quarter ended June 30, +501% to $24.9 million. + Excellent recent earnings-per-share growth. Here are the quarterly EPS figures for the last eight quarters:
Sep 07 vs Sep 06: 12c vs (3c) Dec 07 vs Dec 06: 25c vs (6c) Mar 08 vs Mar 07: 9c vs (5c) Jun 08 vs Jun 07: 12c vs (2c) + Strong and rising earnings-per-share estimates: According to recent data from First Call, the consensus earnings estimate for 2008 is 42c, revised upward from 39c 90 days ago (and up from 2007 actual earnings of 30c); and the consensus estimate for 2009 is 48c, unchanged from 90 days ago. + Valuation: At 13 times next year's estimated earnings, the stock is attractively priced. (The 5-year projected earnings growth rate I usually quote here is not available.) + Most recently, for the quarter ended June 30, earnings came in 2c above estimates. Prior to that, for the quarter ended March 31, they missed by a penny. + The company's industry group ("Medical - Ethical Drugs") is ranked #21 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. + The stock's 200-day moving average is rising, indicating a long-term uptrend. -KD, Thursday, September 11, 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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