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Please read carefully our disclaimers at the end of this newsletter. Market Stance: BEARISH (since November 24, 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 S&P Depositary Receipt (SPY)
* Buy prices shown are net after commissions and fees. Today, Wednesday, November 25, 2009, I bought SPY, for both client and my personal accounts. I am moving to a "neutral" position with these two buys today. By "neutral", I mean that the statistical volatility of Deen Capital managed accounts is now equal to (or very close to) that of the S&P 500. My confidence in my bearish call of yesterday is ebbing. The market continues to edge higher, and many of the Chinese stocks which sold off sharply yesterday morning are recovering nicely. Since I rather arbitrarily limit myself to a nominally "bearish" or "neutral" stance, I'll leave my official stance at "bearish" for now. My indicators are sitting on the fence -- one neutral, one bearish, one bullish. But the indicator I tend to regard as perhaps the most important -- the index based on the performance of my stock picks -- is pegged at +10, it's highest possible reading. -KD, Wednesday, November 25, 2009 Bought Telestone Technology (TSTC)
* Buy prices shown are net after commissions and fees. Today, Wednesday, November 25, 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. + Technical: This stock is having a mini-breakout today to a new all-time high on heavy volume. Average volume has increased dramatically since early October, and is still increasing. Most of the new volume is on the buy side. + 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, for the quarter ended Sep 30, +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 14 times trailing 12-month earnings, the stock is still, even after recent gains, 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 #116 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, Wednesday, November 25, 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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