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Please read carefully our disclaimers at the end of this newsletter. Market Stance: BULLISH (since December 8, 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, Tuesday, December 9, 2008, I bought FLR, first for client accounts, then for my personal accounts. Fluor Corp. provides design, engineering, procurement, and construction services. They also offer maintenance services, equipment rental and sales, business support services, and other services. This stock is a component of the S&P 500. Here's why I bought this stock: + This company stands to benefit from Obama's proposed massive spending on infrastructure. + As of November 26, the stock is trading above its 50-day moving average for the first time since early July. Also, the heavy volume recently has been on the buy side. (However, see also "negative factors" below.) + Excellent and accelerating recent sales growth. Here are the quarterly year-to-year sales growth rates from the last four quarters, in chronological order: +30%, +32%, +37%, and, most recently, for the quarter ended Sep 30, +38% to $5.67 billion. + Excellent recent earnings-per-share growth. Here are the quarterly EPS figures for the last eight quarters:
Dec 07 vs Dec 06: $0.74 vs $0.45 Mar 08 vs Mar 07: $0.75 vs $0.47 Jun 08 vs Jun 07: $0.87 vs $0.53 Sep 08 vs Sep 07: $1.01 vs $0.51 + Valuation: At 13 times next year's estimated earnings and a projected 5-year annualized earnings growth rate of 18%, the stock is very attractively priced. + History of earnings surprises: This company has reported earnings-per-share at least 5c above estimates in each of the past four quarters. Most recently, for the quarter ended Sep 30, they "beat the Street" by 10c. + The company's industry group ("Bldg - Heavy Construction") is ranked #98 for relative strength out of 197 industry groups tracked by Investor's Business Daily. This ranking changes daily, and it has been generally rising strongly over recent weeks and months. I chose to buy the stock in spite of the following negative factors: - The stock is trading below a its falling 200-day moving average. This indicates a long-term downtrend. - Strong but falling earnings-per-share estimates for next year: According to recent data from First Call, the consensus earnings estimate for 2008 is $3.60, revised upward from $3.53 90 days ago (and up from 2007 actual earnings of $2.25); and the consensus estimate for 2009 is $3.98, revised downward from $4.21 90 days ago. -KD, Tuesday, December 9, 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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