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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, Monday, December 1, 2008, I bought DV, first for client accounts, then for my personal accounts. DeVry, Inc. owns and manages higher education systems throughout North America. The Institutions are operated under the DeVry University, Ross University, and Becker Conviser Professional Review names. This stock is a component of the IBD 100, the IBD New America, and the S&P 400 SmallCap Indexes. ("IBD" = "Investor's Business Daily") Here's why I bought this stock: + The company stands to benefit from a recession, as laid off workers often go back to school to train for a new career. + Technical: Since October 24, the heavy volume has been on the buy side. A close above $57.55 would be a minor breakout from a 4-week trading range to a new 5-month high. A close above $61.19 would be a major breakout from a 5-month trading range to a new 10-year high. + Excellent and accelerating recent sales growth. Here are the quarterly year-to-year sales growth rates from the last four quarters, in chronological order: +16%, +18%, +19%, and, most recently, for the quarter ended Sep 30, +21% to $303.7 million. + Excellent recent earnings-per-share growth. Here are the quarterly EPS figures for the last eight quarters:
Dec 07 vs Dec 06: 49c vs 23c Mar 08 vs Mar 07: 53c vs 32c Jun 08 vs Jun 07: 34c vs 26c Sep 08 vs Sep 07: 48c vs 40c + Strong and rising earnings-per-share estimates: According to recent data from First Call, the consensus earnings estimate for FY 09 (ends June 30) is $2.20, revised upward from $2.17 90 days ago (and up from FY 08 actual earnings of $1.77); and the consensus estimate for FY 10 is $2.73, revised upward from $2.67 90 days ago. + Valuation: At 21 times next year's estimated earnings and a projected 5-year annualized earnings growth rate of 23%, the stock is very attractively priced. + History of earnings surprises: This company has reported earnings-per-share at least 4c above estimates in four of the past five quarters. Most recently, for the quarter ended Sep 30, they "beat the Street" by 4c. + The company's industry group ("Commercial Services - Schools") is ranked #2 for relative strength out of 197 industry groups tracked by Investor's Business Daily. This ranking changes daily, and it has been generally steady to rising just slightly 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: - There is probable resistance in the $60 area. The 10-year high for this stock is $61.19, set just over 5 months ago on June 27. -KD, Monday, December 1, 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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