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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.
* Buy prices shown are net after commissions and fees. Today, Tuesday, December 30, 2008, I bought ACET, first for client accounts, then for my personal accounts. Aceto Corp. develops, manufactures, distributes, and markets chemicals are used in the agricultural, color producing, pharmaceutical, and surface coating industries. Here's why I bought this stock: + Technical: This stock is in an uptrend, and, in that context, a 10% drop yesterday looks like a buying opportunity. The heaviest volume lately has been on the buy side. + Excellent recent sales growth. Here are the quarterly year-to-year sales growth rates from the last four quarters, in chronological order: +2%, +29%, +20%, and, most recently, for the quarter ended Sep 30, +18% to $93.8 million. + Excellent recent earnings-per-share growth. Here are the quarterly EPS figures for the last eight quarters:
Dec 07 vs Dec 06: 4c vs 7c Mar 08 vs Mar 07: 12c vs 7c Jun 08 vs Jun 07: 32c vs 17c Sep 08 vs Sep 07: 18c vs 13c + 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 66c, unchanged from 90 days ago (and up from FY 08 actual earnings of 61c); and the consensus estimate for FY 10 is 81c, revised upward from 73c 90 days ago. + Valuation: At 11 times next year's estimated earnings, the stock is attractively priced. (The 5-year earnings growth rate is not available, but next year's earnings-per-share are expected to grow by 23%.) + History of earnings surprises: This company has reported earnings-per-share at least a penny above estimates in each of the past three quarters. Most recently, for the quarter ended September 30, they "beat the Street" by 2c. + 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: - The company's industry group ("Chemicals - Specialty") is ranked #105 for relative strength out of 197 industry groups tracked by Investor's Business Daily. This ranking changes daily, and it has been generally falling over recent weeks and months. -KD, Tuesday, December 30, 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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