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Please read carefully our disclaimers at the end of this newsletter. Market Stance: BEARISH (since December 13, 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 Shenandoah Telecom (SHEN)
* Buy prices shown are net after commissions and fees. Today, Thursday, December 18, 2008, I bought SHEN, first for client accounts, then for my personal accounts. Shenandoah Telecommunications Company, through its subsidiaries, offers integrated, full service telecommunications products and services in the Northern Shenandoah Valley and surrounding areas. This stock is a component of the IBD 100 Index. ("IBD" = "Investor's Business Daily") Here's why I bought this stock: + Breakout: Yesterday, this stock broke out of a 12-month range to a new all-time high on heavy volume (about twice the daily average). + Three quarters of excellent recent sales growth. Here are the quarterly year-to-year sales growth rates from the last four quarters, in chronological order: -17%, +11%, +11%, and, most recently, for the quarter ended Sep 30, +15% to $37.4 million. + Excellent recent earnings-per-share growth. Here are the quarterly EPS figures for the last eight quarters:
Dec 07 vs Dec 06: 16c vs 14c Mar 08 vs Mar 07: 29c vs 25c Jun 08 vs Jun 07: 29c vs 25c Sep 08 vs Sep 07: 32c vs 26c + Strong and rising earnings-per-share estimates: According to recent data from First Call, the consensus earnings estimate for 2008 is $1.10, revised upward from $1.01 90 days ago (and up from 2007 actual earnings of 91c); and the consensus estimate for 2009 is $1.19, revised upward from 96c 90 days ago. + Valuation: At 22 times next year's estimated earnings and a projected 5-year annualized earnings growth rate of 14%, the stock is not over- priced. + History of earnings surprises: This company "beat the Street" by 7c in the quarter ended June 30, and by 3c in the most recent quarter ended September 30. + The company's industry group ("Telecom - Wireless Services") is ranked #73 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, Thursday, December 18, 2008
* Buy and sell prices shown are net after commissions and fees. This means that the gain/loss shown is also net after transaction expenses. Today, Thursday, December 18, 2008, I sold FLR, first for client accounts, then for my personal accounts. The chart pattern this morning hints of a minor double-top, and, on top of that, I notice that earnings estimates for next year are now being revised lower. I pointed this out as a negative factor when I bought the stock, and, since then, the consensus earnings estimate for 2009 has fallen still further. -KD, Thursday, December 18, 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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