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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 Comtech Telecom Corp. (CMTL)
* Buy prices shown are net after commissions and fees. Today, Wednesday, December 31, 2008, I bought CMTL, first for client accounts, then for my personal accounts. Comtech Telecommunications Corp. designs, develops, and manufactures wireless telecommunications products used worldwide for voice, data, facsimile, and video transmissions at microwave frequencies. This stock is a component of the IBD 100 Index. ("IBD" = "Investor's Business Daily") Here's why I bought this stock: + Technical: In the context of a long-term uptrend, we have what may be the end of a short-term downtrend. The stock has been generally slipping in price since a peak on December 8. Today, the stock is up, perhaps marking the end of that slide. Also, the heavy volume lately has very much 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: +36%, +16%, +7%, and, most recently, for the quarter ended Oct 31, +67% to $191.9 million. + Excellent recent earnings-per-share growth. Here are the quarterly EPS figures for the last eight quarters:
Dec 07 vs Dec 06: $0.96 vs $0.70 Mar 08 vs Mar 07: $0.76 vs $0.75 Jun 08 vs Jun 07: $0.67 vs $0.67 Sep 08 vs Sep 07: $1.07 vs $0.59 + Strong and rising earnings-per-share estimates for next year: According to recent data from First Call, the consensus earnings estimate for FY 09 (ends July 31) is $2.93, revised downward from $2.99 90 days ago (and down from FY 08 actual earnings of $2.98); and the consensus estimate for FY 10 is $3.69, revised upward from $3.61 90 days ago. + Valuation: At 12.5 times next year's estimated earnings and a projected 5-year annualized earnings growth rate of 23%, the stock is very attractively priced. + History of earnings surprises: This company has reported earnings-per-share at least 12c above estimates in each of the past four quarters. Most recently, for the quarter ended Oct 31, they "beat the Street" by 26c. + The company's industry group ("Telecom - Wireless Equipment") is ranked #31 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, Wednesday, December 31, 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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