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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 AsiaInfo Holdings Inc. (ASIA)
* Buy prices shown are net after commissions and fees. Today, Wednesday, October 14, 2009, I bought ASIA, first for client accounts, then for my personal accounts. AsiaInfo Holdings, Inc. provides telecommunications software solutions, and information technology (IT) security products and services for telecommunications service providers and other major enterprises in China. This stock is a component of the IBD New America Index. ("IBD" = "Investor's Business Daily") Here's why I bought this stock: + Breakout: The stock is up sharply today on heavy volume. This is a breakout from a 19-week trading range to a new 7-year high. + Volume spike: As I write this, about two hours after the opening bell, volume is already 2.6 times average. + Excellent recent sales growth. Here are the quarterly year-to-year sales growth rates from the last four quarters, in chronological order: +38%, +32%, +46%, and, most recently, for the quarter ended June 30, +39% to $58.6 million. + Excellent recent earnings-per-share growth. Here are the quarterly EPS figures for the last eight quarters:
Sep 08 vs Sep 07: 16c vs 11c Dec 08 vs Dec 07: 22c vs 18c Mar 09 vs Mar 08: 16c vs 11c Jun 09 vs Jun 08: 25c vs 13c + Strong and rising earnings-per-share estimates: According to recent data from First Call, the consensus earnings estimate for 2009 is 90c, revised upward from 80c 90 days ago (and up from 2008 actual earnings of 62c); and the consensus estimate for 2010 is $1.06, revised upward from $1.03 90 days ago. + Valuation: At 22 times next year's estimated earnings and a projected 5-year annualized earnings growth rate of 26%, the stock is still, even after this morning's big gain, attractively priced. + History of earnings surprises: This company has reported earnings-per-share at least2c above estimates in each of the past four quarters. Most recently, for the quarter ended June 30, they "beat the Street" by 8c. + The company's industry group ("Computer Software - Enterprise") is ranked #24 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 fact that earnings are due out October 28. I usually avoid buying so close to the next earnings announcement date. -KD, Wednesday, October 14, 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.
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