|
Please read carefully our disclaimers at the end of this newsletter. Market Stance: BEARISH (since November 6, 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 PetMed Express Inc. (PETS)
* Buy prices shown are net after commissions and fees. Today, Wednesday, November 19, 2008, I bought PETS, first for client accounts, then for my personal accounts. PetMed Express, Inc. offers prescription and non-prescription pet medications, as well as health and nutritional supplements, via telephone, fax, mail, and the Internet to customers throughout the U.S. This stock is a component of the IBD 100 and the IBD New America Indexes. ("IBD" = "Investor's Business Daily") Here's why I bought this stock: + My emphasis remains very heavily on cash in this strong down market. Even after this buy, we are 95% in cash. + This company's business model should do well during a recession, as pet owners seek ways to save money. Buying their pets' medications online from PetMed Express is one way to do this. + This stock has demonstrated to swim upstream in a strong down current. Last month, it broke out to a new 30-month high, and it has held onto that gain since, even in the face of an extreme down market. + Average volume has increased dramatically since mid-October, with most of the volume on the buy side. + Excellent recent sales growth. Here are the quarterly year-to-year sales growth rates from the last four quarters, in chronological order: +19%, +11%, +16%, and, most recently, for the quarter ended Sep 30, +16% to $59.6 million. + Excellent recent earnings-per-share growth. Here are the quarterly EPS figures for the last eight quarters:
Dec 07 vs Dec 06: 18c vs 11c Mar 08 vs Mar 07: 20c vs 15c Jun 08 vs Jun 07: 28c vs 24c Sep 08 vs Sep 07: 25c vs 18c + Strong and rising earnings-per-share estimates: According to recent data from First Call, the consensus earnings estimate for FY 09 (ends March 31) is 97c, revised upward from 89c 90 days ago (and up from FY 08 actual earnings of 81c); and the consensus estimate for FY 10 is $1.09, revised upward from $1.01 90 days ago. + Valuation: At 16 times next year's estimated earnings and a projected 5-year annualized earnings growth rate of 17.5%, 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 four quarters. Most recently, for the quarter ended Sep 30, they "beat the Street" by 5c. + 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 ("Retail - Mail Order & Direct") is ranked #103 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, November 19, 2008 Sold LHC Group Inc. (LHCG) +3.9%
* Buy and sell prices shown are net after commissions and fees. This means that the gain/loss shown is also net after transaction expenses. Today, Wednesday, November 19, 2008, I sold LHCG, first for client accounts, then for my personal accounts. I chose to sell simply because I wanted to make sure we lock in a gain on this one. I am setting my sights low in this extremely challenging market. I'll take a 4% gain in 3 weeks, considering that the S&P is down well over 10% over the same time frame. My focus, as you know, is on holding cash until I see some early evidence that the market is turning around. We are now 95% in cash. -KD, Wednesday, November 19, 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.
The Deen's List Copyright © 2008 Deen Capital Management, Inc. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||