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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 TeleCommunication Systems Inc (TSYS)
* Buy prices shown are net after commissions and fees. Today, Monday, December 22, 2008, I bought TSYS, first for client accounts, then for my personal accounts. TeleCommunication Systems, Inc. develops network applications that enable the delivery of Internet content, short messages, and enhanced data communication services to a variety of wireless devices. The Company's wireless Internet gateway enables wireless carriers and enterprises to provide customers and employees with real-time, wireless access to Internet content and e-mail. Here's why I bought this stock: + Breakout attempt: A close above $8.56 today would be a breakout from a 15-week trading range to a new 7-year high. I mention this because the stock has already traded as high as $8.74 this morning. (We are buying below both of these price points on a tiny pullback.) + Volume is heavy on the buy side today, yesterday, and for the past five weeks. + Excellent and accelerating recent sales growth. Here are the quarterly year-to-year sales growth rates from the last four quarters, in chronological order: +22%, +18%, +24%, and, most recently, for the quarter ended Sep 30, +50% to $56.5 million. + Mostly excellent recent earnings-per-share growth. Here are the quarterly EPS figures for the last eight quarters:
Dec 07 vs Dec 06: 6c vs 1c Mar 08 vs Mar 07: 11c vs 2c Jun 08 vs Jun 07: 9c vs (6c) Sep 08 vs Sep 07: 6c vs 4c + Strong and rising earnings-per-share estimates: According to recent data from First Call, the consensus earnings estimate for 2008 is 57c, revised upward from 53c 90 days ago (and up from 2007 actual earnings of 6c); and the consensus estimate for 2009 is 62c, revised upward from 57c 90 days ago. + Valuation: At 13.5 times next year's estimated earnings and a projected 5-year annualized earnings growth rate of 13%, the stock is attractively priced. + History of earnings surprises: This company has reported earnings-per-share at least a penny above estimates in each of the past five quarters. Most recently, for the quarter ended Sep 30, they "beat the Street" by 4c. + The company's industry group ("Computer Software - Enterprise") is ranked #57 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, Monday, December 22, 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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