|
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 California Water Services (CWT)
* Buy prices shown are net after commissions and fees. Today, Monday, November 24, 2008, I bought CWT, first for client accounts, then for my personal accounts. California Water Service Group is the parent company of several water utility companies. The Company provides regulated and non-regulated water utility services to customers in California, New Mexico, and Washington. This stock is a component of the IBD 100 Index. ("IBD" = "Investor's Business Daily") Here's why I bought this stock: + Breakout: Las week, the stock broke out of a 13-week trading range to a new 7-month high. + Average trading volume has been rising, and the heaviest volume has been on the buy side. + Excellent and accelerating recent sales growth. Here are the quarterly year-to-year sales growth rates from the last four quarters, in chronological order: +6%, +2%, +10%, and, most recently, for the quarter ended Sep 30, + 16 to $131.7 million. + Excellent recent earnings-per-share growth. Here are the quarterly EPS figures for the last eight quarters:
Dec 07 vs Dec 06: $0.39 vs $0.31 Mar 08 vs Mar 07: $0.01 vs $0.07 Jun 08 vs Jun 07: $0.48 vs $0.37 Sep 08 vs Sep 07: $1.06 vs $0.67 + Strong and rising earnings-per-share estimates: According to recent data from First Call, the consensus earnings estimate for 2008 is $1.92, revised upward from $1.67 90 days ago (and up from 2007 actual earnings of $1.50); and the consensus estimate for 2010 is $2.06, revised upward from $1.99 90 days ago. + History of earnings surprises: This company "beat the Street" by 5c in the quarter ended June 30, and by 27c in the most recent quarter ended Sep 30. + The company's industry group ("Utility - Water Supply") is ranked #16 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. I chose to buy the stock in spite of the following negative factor: - Valuation: At 20 times next year's estimated earnings and a projected 5-year annualized earnings growth rate of 8%, the stock appears over-priced. However, I suspect that long-term growth rate projection could be low. -KD, Monday, November 24, 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. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||