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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 TransInfo Tech. Corp. (CTFO)
* Buy prices shown are net after commissions and fees. Today, Friday, January 8, 2010, I bought CTFO, for both client and my personal accounts. China TransInfo Technology Corp. provides public transportation information systems technology and solutions in China. Here's why I bought this stock: + Mini-breakout: Earlier this week (Wed Jan 6), this stock broke out of an 8-week trading range to a new 10-week high on extremely heavy volume. + Volume spike: Volume on that breakout day was a 52-week record, and more than 4 times average. + Excellent recent sales growth. Here are the quarterly year-to-year sales growth rates from the last four quarters, in chronological order: +176%, +40%, +87%, and, most recently, for the quarter ended Sep 30, +115% to $19.2 million. + Mostly excellent recent earnings-per-share growth. Here are the quarterly EPS figures for the last eight quarters:
Dec 08 vs Dec 07: 19c vs 4c Mar 09 vs Mar 08: 7c vs 9c Jun 09 vs Jun 08: 13c vs 11c Sep 09 vs Sep 08: 18c vs 15c + Valuation: At 12 times next year's estimated earnings and a projected 5-year annualized earnings growth rate of 22%, the stock is still, even after Wednesday's big gain, very attractively priced. + History of earnings surprises: This company has reported earnings-per-share at least a penny above estimates in four of the past five quarters. Most recently, for the quarter ended Sep 30, they "beat the Street" by a penny. + 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 factors: - Strong but slightly falling earnings-per-share estimates: According to recent data from First Call, the consensus earnings estimate for 2009 is 59, unchanged from 90 days ago (and up from 2008 actual earnings of 54c); and the consensus estimate for 2010 is 80c, revised downward from 82c 90 days ago. - The company's industry group ("Computer Software - Enterprise") is ranked #46 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, Friday, January 8, 2010 Sold Research In Motion (RIMM) -6.7%
* 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, Friday, January 8, 2010, I sold RIMM, first for client accounts, then for my personal accounts. This was a judgment call. RIMM is our poorest performer, and all the excitement around Google's new smart phone doesn't help. I decided to take a small loss and get out. -KD, Friday, January 8, 2010 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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