|
Please read carefully our disclaimers at the end of this newsletter. Market Stance: BULLISH (since October 9, 2009) 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 Interactive Intelligence (ININ)
* Buy prices shown are net after commissions and fees. Today, Tuesday, October 13, 2009, I bought ININ, first for client accounts, then for my personal accounts. Interactive Intelligence, Inc. and its subsidiaries provide software application suites for voice over Internet protocol (VoIP) business communications. This stock is a component of the IBD 100 Index. ("IBD" = "Investor's Business Daily") Here's why I bought this stock: + News: Yesterday, October 12, after the close, the company said that, based on preliminary results, it expects to report better-than-expected third quarter earnings. They're predicting 28c to 31c per share, excluding items (Street consensus 15) on revenue of $32 to $34 million (consensus $31.3 million). + A "true surprise"*: For five weeks prior to the news, the stock has been stock in a tight trading range. Now, this morning, the stock is up sharply on extremely heavy volume. * "True surprise" is my term to describe a company news item that ignites heavy buying and that was not preceded by a short-term run-up in the stock price (i.e. not preceded by rumor). + Breakout: The price movement this morning represents a breakout from a 5-week trading range to a new 20-month high. + Volume spike: As I write this, 3 hours after the open, volume is already more than 5 times average, and has already set a 12-month record. + Recent earnings-per-share growth. Here are the quarterly EPS figures for the last eight quarters:
Sep 08 vs Sep 07: 11c vs 19c Dec 08 vs Dec 07: 18c vs 16c Mar 09 vs Mar 08: 16c vs 15c Jun 09 vs Jun 08: 24c vs 13c + Strong and rising earnings-per-share estimates: According to recent data from First Call, the consensus earnings estimate for 2009 is 75c, revised upward from 70c 90 days ago (and up from 2008 actual earnings of 56c); and the consensus estimate for 2010 is 88c, revised upward from 82c 90 days ago. + Valuation: At 24 times next year's estimated earnings and a projected 5-year annualized earnings growth rate of 17.5%, the stock is still, even after today's big gain, moderately priced. Yesterday's announcement suggests they will beat this time by at least 13c. + History of earnings surprises: This company has reported earnings-per-share at least 5c above estimates in each of the past three quarters. Most recently, for the quarter ended June 30, they "beat the Street" by 6c. + The company's industry group ("Computer Software - Enterprise") is ranked #26 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: - Tepid recent sales growth. Here are the quarterly year-to-year sales growth rates from the last four quarters, in chronological order: +3%, +7%, +0%, and, most recently, for the quarter ended June 30, +7% to $32.9 million. -KD, Tuesday, October 13, 2009 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.
The Deen's List Copyright © 2009 Deen Capital Management, Inc. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||