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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 AECOM Technology Corp. (ACM)
* Buy prices shown are net after commissions and fees. Today, Tuesday, December 23, 2008, I bought ACM, first for client accounts, then for my personal accounts. AECOM Technology Corp. provides professional technical services to the U.S. government, state, local, and non-U.S. governments and agencies, and commercial customers. Their services include consulting, planning, architecture, engineering, construction management, project management, asset management, environmental services, and design-build services. This stock is a component of the IBD 100 Index. ("IBD" = "Investor's Business Daily") Here's why I bought this stock: + The stock is attracting because the company should be a beneficiary of proposed massive spending on U.S. infrastructure. + Technical: The stock has been trending higher against a down market since late October. + I think the stock is a buy today in particular because it has been down the past 3 days, and today is up (again in a down market). I think this is an end-of-dip moment -- an excellent entry point. + Excellent recent sales growth. Here are the quarterly year-to-year sales growth rates from the last four quarters, in chronological order: +15%, +7%, +20%, and, most recently, for the quarter ended Sep 30, +46% to $1.63 billion. + Excellent recent earnings-per-share growth. Here are the quarterly EPS figures for the last eight quarters:
Dec 07 vs Dec 06: 29c vs 26c Mar 08 vs Mar 07: 35c vs 22c Jun 08 vs Jun 07: 37c vs 27c Sep 08 vs Sep 07: 40c vs 29c + Strong earnings-per-share estimates: According to recent data from First Call, the consensus earnings estimate for FY 09 (ends Sep 30) is $1.68, revised upward from $1.67 90 days ago (and up from FY 08 actual earnings of $1.40); and the consensus estimate for FY 10 is $2.00, revised downward from $2.04 90 days ago. + Valuation: At 14.5 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 2c above estimates in each of the past four quarters. Most recently, for the quarter ended Sep 30, they "beat the Street" by 3c. + The company's industry group ("Bldg - Heavy Construction") is ranked #89 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. I chose to buy the stock in spite of the following negative factor: - As cited above, the earnings estimate for next year has come down slightly over the past 90 days. -KD, Tuesday, December 23, 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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