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Please read carefully our disclaimers at the end of this newsletter. Market Stance: BEARISH (since June 25, 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 Cirrus Logic Inc. (CRUS)
* Buy prices shown are net after commissions and fees. Today, Tuesday, July 20, 2010, I bought CRUS, for both client and my personal accounts. Cirrus Logic, Inc. develops high-precision analog and mixed-signal integrated circuits (ICs) and embedded software for consumer/commercial audio, industrial, and energy markets. This stock is a component of the IBD 100 Index. ("IBD" = "Investor's Business Daily") Here's why I bought this stock: + News: This morning, before the open, the company announced results for the quarter ended June 30. Earnings came in at 29c per diluted share (vs a loss of (1c) last year and analysts' consensus 28c). Revenue was up 118% to $81.9 million (analysts' consensus $81.2 million). + Bullish chart pattern: There's been a huge explosion in daily trading volume in this stock since late April. Most of the new volume has been on the buy side. + Mini-breakout: The stock is up today on heavy volume, and very close to (within pennies of) breaking out of a 4-week range to a new 8-year high. + Excellent and accelerating recent sales growth. Here are the quarterly year-to-year sales growth rates from the last four quarters, in chronological order: +4%, +49%, 87%, and, most recently, as cited above, +118% to $81.9 million. + Dramatic turnaround in recent earnings-per-share growth. Here are the quarterly EPS figures for the last eight quarters:
Sep 09 vs Sep 08: 11c vs 15c Dec 09 vs Dec 08: 19c vs 7c Mar 10 vs Mar 09: 16c vs (1c) Jun 10 vs Jun 09: 29c vs (1c) + Strong and rising earnings-per-share estimates: According to recent data from First Call, the consensus earnings estimate for FY 11 is $1.15, revised upward from 70c 90 days ago (and up from FY 10 actual earnings of 44c); and the consensus estimate for FY 12 is $1.22, revised upward from 77c 90 days ago. + Valuation: At 15 times next year's estimated earnings and a projected 5-year annualized earnings growth rate of 20%, the stock is attractively priced. + History of earnings surprises: This company has reported earnings-per-share at least a penny above estimates in eight of the past ten quarters. Most recently, as cited above, they beat by a penny. + The company's industry group ("Elec - Semiconductor Fabless") is ranked #9 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, Tuesday, July 20, 2010
* Buy prices shown are net after commissions. 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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