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Please read carefully our disclaimers at the end of this newsletter. Market Stance: BULLISH (since November 16, 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 China Green Agriculture, Inc. (CGA)
* Buy prices shown are net after commissions and fees. Today, Wednesday, November 18, 2009, I bought CGA, for both client and my personal accounts. China Green Agriculture, Inc., through its subsidiaries, researches, develops, manufactures, and distributes humic acid based compound fertilizers in China. The company sells approximately 130 fertilizer products. Here's why I bought this stock: + News: This morning, before the open, the company announced that the National Taxation Bureau has recently approved a VAT exemption for its organic fertilizer product. + Breakout: The stock is up sharply today on extremely heavy volume. This move is a breakout from a 3-month trading range to a new 14-month high. + Volume spike: As I write this, about half an hour before the close, volume is 4.5 times the daily average, and has set a new 12-month record. + Excellent recent sales growth. Here are the quarterly year-to-year sales growth rates from the last four quarters, in chronological order: +86%, +99%, +45%, and, most recently, for the quarter ended Sep 30, +27% to $11.3 million. + Excellent recent earnings-per-share growth. Here are the quarterly EPS figures for the last eight quarters:
Dec 08 vs Dec 07: 14c vs 6c Mar 09 vs Mar 08: 21c vs 9c Jun 09 vs Jun 08: 24c vs 7c Sep 09 vs Sep 08: 24c vs 19c + Strong and rising earnings-per-share estimates: According to recent data from First Call, the consensus earnings estimate for FY 10 is 91c, revised upward from 85c 90 days ago (and up from FY 09 actual earnings of 78c); and the consensus estimate for FY 11 is $1.51, revised upward from $1.33 90 days ago. + Valuation: At 10 times next year's estimated earnings and a projected 5-year annualized earnings growth rate of 24%, the stock is very attractively priced. + History of earnings surprises: This company has reported earnings-per-share at least 3c above estimates in each of the past four quarters. Most recently, for the quarter ended Sep 30, they "beat the Street" by 4c. + 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 ("Chemicals - Fertilizers") is ranked #196 for relative strength out of 197 industry groups tracked by Investor's Business Daily. This ranking changes daily, and it has been generally falling over recent weeks and months. -KD, Wednesday, November 18, 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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