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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.
* Buy prices shown are net after commissions and fees. Today, Wednesday, November 26, 2008, I bought GXDX, first for client accounts, then for my personal accounts. Genoptix Inc is a medical laboratory that provides medical services to hematologists and oncologists. 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: + Technical: This stock has taken a 2-week dip from $39.44, the all-time high set on November 13, down to $29.51 yesterday. But, in my view, the longer term uptrend remains intact. I suspect that dip ended yesterday, and represents an excellent buying opportunity. + Excellent recent sales growth. Here are the quarterly year-to-year sales growth rates from the last four quarters, in chronological order: +137%, +109%, +99%, and, most recently, for the quarter ended Sep 30, +99% to $32.1 million. + Excellent recent earnings-per-share growth. Here are the quarterly EPS figures for the last eight quarters:
Dec 07 vs Dec 06: 29c vs (2c) Mar 08 vs Mar 07: 34c vs 8c Jun 08 vs Jun 07: 46c vs 23c Sep 08 vs Sep 07: 52c vs 22c + Rising earnings-per-share estimates: According to recent data from First Call, the consensus earnings estimate for 2008 is $1.31, revised upward from $1.16 90 days ago (and up from 2007 actual earnings of 83c); and the consensus estimate for 2009 is $1.24, revised upward from $1.11 90 days ago. + Valuation: At 24 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: This company has reported earnings-per-share at least 7c above estimates in each of the past five quarters. Most recently, for the quarter ended Sep 30, they "beat the Street" by 24c. + 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 factors: - The 2009 consensus earnings estimate of $1.24 is down from the 2008 estimate of $1.31. However, as stated above, both these estimates are rising. - The company's industry group ("Medical/Dental Services") is ranked #45 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 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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