|
Please read carefully our disclaimers at the end of this newsletter. Market Stance: BEARISH (since April 27, 2010) Contents
Typical Client 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 Avago Technologies Ltd. (AVGO)
* Buy prices shown are net after commissions and fees. Today, Wednesday, June 16, 2010, I bought AVGO, for both client and my personal accounts. Avago Technologies Limited designs, develops, and sells analog semiconductor devices worldwide. I bought AVGO shortly before the close; I'm writing this shortly after the close. Here's why I bought this stock: + Breakout: Today, the stock was up about 2.8%, breaking out of an 8-week trading range to a new all-time high. + Volume spike, mostly on the buy side: Today's breakout was accompanied by about 5 times average volume. + Dramatic turnaround in recent sales growth. Here are the quarterly year-to-year sales growth rates from the last four quarters, in chronological order: -17%, -4%, +24%, and, most recently, for the quarter ended April 30, +58% to $515.0 million. + Dramatic turnaround in recent earnings-per-share growth. Here are the quarterly EPS figures for the last eight quarters:
Jun 09 vs Jun 08: 17c vs 20c Sep 09 vs Sep 08: 31c vs 22c Dec 09 vs Dec 08: 36c vs 16c Mar 10 vs Mar 09: 47c vs (1c) + Strong earnings-per-share estimates: I do not see any earnings estimate data from my usual source, finance.yahoo.com, but I did find an estimate of $1.85 for FY 10 (ends Oct 31), and $2.02 for FY 11. These are both well above 2009 actual earnings of $0.62. I could find no data on whether these estimates have gone up or down recently. + Valuation: At 11 times next year's estimated earnings, the stock is attractively priced. I could not find 5-year earnings growth projections, nor could I find any data on past earnings surprises. + 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 ("Elec - Semiconductor Fabless") is ranked #15 for relative strength out of 197 industry groups tracked by Investor's Business Daily. This ranking changes daily, and it has been generally falling just slightly recently. -KD, Wednesday, June 16, 2010
* Buy prices shown are net after commissions. ** 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.
The Deen's List Copyright © 2010 Deen Capital Management, Inc. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||