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Please read carefully our disclaimers at the end of this newsletter. Market Stance: BEARISH (since October 23, 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 Telestone Technology (TSTC)
* Buy prices shown are net after commissions and fees. Today, Friday, November 13, 2009, I bought TSTC, for both client and my personal accounts. Telestone Technologies Corporation provides wireless communications coverage solutions in China and internationally. Here's why I bought this stock: + News: Yesterday, after the close, the company announced financial results for the quarter ended Sep 30. Earnings came in at 41c per diluted share (vs 11c last year). Revenue was up 125% to $18.9 million. Earnings estimates and earnings surprise history data are not available for this little-known stock. + Breakout: The stock is up sharply this morning on extremely heavy volume. This morning's price move confirms an earlier breakout on October 20. + Huge volume spike: As I write this, about two hours after the opening bell, volume is already 9 times the daily average. + Excellent and accelerating recent sales growth. Here are the quarterly year-to-year sales growth rates from the last four quarters, in chronological order: +14%, +22%, +100%, and, most recently, as cited above, +125%. + Excellent recent earnings-per-share growth. Here are the quarterly EPS figures for the last eight quarters:
Dec 08 vs Dec 07: 32c vs 24c Mar 09 vs Mar 08: 11c vs 8c Jun 09 vs Jun 08: 19c vs 17c Sep 09 vs Sep 08: 41c vs 11c + Valuation: At 12 times trailing 12-month earnings, the stock is still, even after this morning's big gain, very attractively priced. + 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 ("Telecom - Wireless Equipment") is ranked #81 for relative strength out of 197 industry groups tracked by Investor's Business Daily. This ranking changes daily, but it has been generally falling over recent weeks and months. -KD, Friday, November 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.
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