The Deen's ListTM
Our goal since Oct. 2005: Outperform the S&P through up markets and down.
A service of Deen Capital Management, Inc. (www.deencapital.com)
Vol.7 #260 Wednesday, October 21, 2009 9:38AM EDT

Please read carefully our disclaimers at the end of this newsletter.

Market Stance: BULLISH (since October 9, 2009)

Contents

Performance
Bought Telestone Technology (TSTC)
Open Positions
Subscription Information
Privacy Policy
Disclaimers
Contact Us

Performance

Deen Capital S&P 500
Year-to-date as of October 20, 2009 +20.9% * +23.2%
12 months (Oct 20, 2008 to Oct 20, 2009) +10.9% * +13.7%
24 months (Oct 20, 2007 to Oct 20, 2009) -7.6% * -23.7%
36 months (Oct 20, 2006 to Oct 20, 2009) +22.4% * -14.9%
48 months (Oct 20, 2005 to Oct 20, 2009) +53.9% * +0.6%

* 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 Telestone Technology (TSTC)

Initial percent of portfolio (approx.)5.0%
Net buy price in managed accounts*$10.91
Most recent close (Oct 20)$11.15
Net change (based on net buy price)-0.24
Today's volume as of Oct 20 9,840 ($107,375)
Average daily volume135,400 ($1.5 million)
This year's earnings-per-sharen/a
Next year's earnings-per-sharen/a
P/E using next year's earningsn/a
Earnings growth rate, next 5 yearsn/a
Corporate HeadquartersBeijing, China
Web sitewww.telestone.com

* Buy prices shown are net after commissions and fees.

Today, Wednesday, October 21, 2009, I bought TSTC, first for client accounts, then for my personal accounts.

Telestone Technologies Corp. provides wireless communications coverage solutions in China and internationally.

Here's why I bought this stock:

+ News: Yesterday, before the open, the company announced that its Wireless Fiber Distribution System passed all testing procedures of the FCC.

+ Breakout: The stock soared 31% yesterday on enormous volume. This price move was a breakout from a 33-month trading range to a new all-time high.

+ Volume spike: Yesterday's volume was some 22 times average. Incredible.

+ Three quarters of excellent recent sales growth. Here are the quarterly year-to-year sales growth rates from the last four quarters, in chronological order: -10%, +14%, +22%, and, most recently, for the quarter ended June 30, +12.1% to $12.1 million.

+ Three quarters of excellent 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: 32c vs 24c
Mar 09 vs Mar 08: 11c vs  8c
Jun 09 vs Jun 08: 19c vs 17c

Earnings estimates and earnings surprise history data are not available for this little-known stock.

+ Valuation: At 15 times trailing 12-month earnings, the stock is still, even after yesterday's big gain, attractively priced.

+ The company's industry group ("Telecom - Wireless Equipment") is ranked #49 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, October 21, 2009

Open Positions

Model Portfolio

Company Name Stock
Symbol
Buy
Date
NetBuy
Price*
Current
Price**
Weeks
Held
% of
Portfolio
Gain
(Loss)
Telestone Technology TSTC 10/21/09 $10.91 $10.69 0.0 4.8% -2.1%
Diedrich Coffee Inc. DDRX 10/19/09 $28.03 $28.90 0.3 5.3% +3.1%
AsiaInfo Holdings Inc. ASIA 10/14/09 $23.38 $23.79 1.0 5.0% +1.7%
Interactive Intelligence ININ 10/13/09 $21.49 $22.79 1.1 5.2% +6.0%
S&P Depositary Receipt SPY 10/09/09 $107.12 $109.45 1.7 39.5% +2.2%
China Automotive Systems CAAS 10/09/09 $10.51 $12.26 1.7 5.7% +16.6%
S&P Depositary Receipt SPY 10/06/09 $105.96 $109.45 2.1 15.8% +3.3%
Lincoln Educational LINC 09/28/09 $22.65 $24.36 3.3 5.0% +7.6%
Zhongpin, Inc. HOGS 09/08/09 $11.75 $15.91 6.1 6.2% +35.4%
Cash 7.5%  
Total 100%  

* Buy prices shown are net after commissions and fees.

** Current prices are at least 20 minutes old.

Subscription Information

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.

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Privacy Policy

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Disclaimers

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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