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Please read carefully our disclaimers at the end of this newsletter. Market Stance: BULLISH (since December 1, 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 Sky One Medical (CSKI)
* Buy prices shown are net after commissions and fees. Today, Thursday, December 3, 2009, I bought CSKI, for both client and my personal accounts. China Sky One Medical, Inc., through its subsidiaries, develops, manufactures and sells over-the-counter, branded nutritional supplements, and over-the-counter plant and herb-based pharmaceutical and medicinal products primarily in China. Here's why I bought this stock: + Poised to break out: The stock has generally been rising since early November, and is now very close to surpassing the June 9 closing peak of $17.56. If it does this, that would be a breakout from a 6-month trading range to a new 11-month high. Because the buying volume during this 5-week run has been so heavy, I suspect that this breakout is likely to happen soon. + Excellent recent sales growth. Here are the quarterly year-to-year sales growth rates from the last four quarters, in chronological order: +104%, +100%, +35%, and, most recently, for the quarter ended Sep 30, +46% to $43.2 million. + Excellent recent earnings-per-share growth. Here are the quarterly EPS figures for the last eight quarters:
Dec 08 vs Dec 07: 45c vs 25c Mar 09 vs Mar 08: 43c vs 26c Jun 09 vs Jun 08: 57c vs 50c Sep 09 vs Sep 08: 74c vs 60c + Strong and steady to rising earnings-per-share estimates: According to recent data from First Call, the consensus earnings estimate for 2009 is $2.31, revised upward from $2.23 90 days ago (and up from 2008 actual earnings of $1.87); and the consensus estimate for 2010 is $2.65, unchanged from 90 days ago. + Valuation: At 7 times next year's estimated earnings, the stock is very attractively priced. + History of earnings surprises: This company has reported earnings-per-share at least 2c above estimates in each of the past six quarters. Most recently, for the quarter ended Sep 30, they "beat the Street" by 13c. + The company's industry group ("Medical - Generic Drugs") is ranked #14 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, Thursday, December 3, 2009 Sold S&P Depositary Receipt (SPY) +1.2%
* Buy and sell prices shown are net after commissions and fees. This means that the gain/loss shown is also net after transaction expenses. Today, Thursday, December 3, 2009, I sold SPY, for both client and my personal accounts. I am selling just enough SPY to pay for the purchase of CSKI. We remain fully invested. -KD, Thursday, December 3, 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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