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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 Almost Family Inc. (AFAM)
* Buy prices shown are net after commissions and fees. Today, Wednesday, November 26, 2008, I bought AFAM, first for client accounts, then for my personal accounts. Almost Family, Inc. provides adult day health services to older and special needs adults as an alternative to nursing home placement. 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: + The company's business model is arguably recession-proof. + Technical: The stock is in a clear long-term uptrend (it has doubled since April), but recently the price has dipped from a peak of $51.47 on November 7 down to $39.01 last Friday, November 21. I suspect that November 21 marks the end of this short-term dip, and that the long-term uptrend will soon re-assert itself. we are buying at a price that is a point or so below the November 21 high. Note that the November low is higher than the October low. I mention this to support my claim that this recent dip does not challenge the long-term uptrend. + Excellent and accelerating recent sales growth. Here are the quarterly year-to-year sales growth rates from the last four quarters, in chronological order: +38%, +23%, +50%, and, most recently, for the quarter ended Sep 30, +84% to $58.7 million. + Excellent recent earnings-per-share growth. Here are the quarterly EPS figures for the last eight quarters:
Dec 07 vs Dec 06: 37c vs 26c Mar 08 vs Mar 07: 45c vs 33c Jun 08 vs Jun 07: 50c vs 35c Sep 08 vs Sep 07: 57c vs 35c + Strong and rising earnings-per-share estimates: According to recent data from First Call, the consensus earnings estimate for 2008 is $2.08, revised upward from $1.89 90 days ago (and up from 2007 actual earnings of $1.40); and the consensus estimate for 2009 is $2.48, revised upward from $2.24 90 days ago. + Valuation: At 16 times next year's estimated earnings and a projected 5-year annualized earnings growth rate of 34%, the stock is very attractively priced. + History of earnings surprises: This company has reported earnings-per-share at least 3c above estimates in each of the past four quarters, including the most recently reported quarter, ended Sep 30, which "beat the Street" by 13c. + The company's industry group ("Medical - Outpatient / Home Care") is ranked #6 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, Wednesday, November 26, 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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