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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 Credit Acceptance Corp. (CACC)
* Buy prices shown are net after commissions and fees. Today, Thursday, December 17, 2009, I bought CACC, for both client and my personal accounts. Credit Acceptance Corp. provides auto loans to consumers primarily in the United States. They offer their products through a network of automobile dealers. This stock is a component of the IBD 100 Index. ("IBD" = "Investor's Business Daily") Here's why I bought this stock: + Breakout: Yesterday, the stock was up 8% to $39.05 on very heavy volume. This move was a breakout from an 8-week trading range to a new 10-year high. + Volume spike: Yesterday's volume was more than 5 times average, and set a 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: +36%, +24%, +23%, and, most recently, for the quarter ended Sep 30, +25% to $100.3 million. + Excellent recent earnings-per-share growth. Here are the quarterly EPS figures for the last eight quarters:
Dec 08 vs Dec 07: $0.76 vs $0.48 Mar 09 vs Mar 08: $0.79 vs $0.54 Jun 09 vs Jun 08: $0.96 vs $0.65 Sep 09 vs Sep 08: $1.10 vs $0.72 + Strong earnings-per-share estimates: According to recent data from First Call, the consensus earnings estimate for 2009 is $4.57, up from 2008 actual earnings of $2.66 and the consensus estimate for 2010 is $4.94. These numbers represent new coverage by a single analyst. 90-days-ago estimates are not available. + Valuation: At 8 times next year's estimated earnings, the stock is still, even after yesterday's big gain, 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 ("Finance - Consumer / Commercial Loans") is ranked #36 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, Thursday, December 17, 2009 Sold S&P Depositary Receipt (SPY) +0.5%
* 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 17, 2009, I sold SPY, first for client accounts, then for my personal accounts. I sold just enough SPY to pay for CACC. We remain fully invested. -KD, Thursday, December 17, 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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