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Please read carefully our disclaimers at the end of this newsletter. Market Stance: BULLISH (since July 24, 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 Old Dominion Freight (ODFL)
* Buy prices shown are net after commissions and fees. Today, Wednesday, July 28, 2010, I bought ODFL, for both client and my personal accounts. Old Dominion Freight Line, Inc. operates as a less-than-truckload (LTL) motor carrier primarily in the United States. The company offers various LTL services and value-added logistics services. 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 58c per diluted share (vs 29c last year and analysts' consensus 46c). Revenue was up 16% to $368.3 million (analysts' consensus $359.2 million). + Recent breakout: The stock is this week breaking out of a 23-month trading range to a new 10-year high. + Volume spike, mostly on the buy side: As I write this, about two-and-a-half hours after the opening bell, volume already exceeds 3x average. + Excellent turnaround in recent sales growth. Here are the quarterly year-to-year sales growth rates from the last four quarters, in chronological order: -22%, -7%, +8%, and, most recently, as cited above, +16%. + Excellent turnaround in recent earnings-per-share growth. Here are the quarterly EPS figures for the last eight quarters:
Sep 09 vs Sep 08: 28c vs 63c Dec 09 vs Dec 08: 26c vs 30c Mar 10 vs Mar 09: 21c vs 11c Jun 10 vs Jun 09: 58c vs 29c + Strong and rising earnings-per-share estimates: According to recent data from First Call, the consensus earnings estimate for 2010 is $1.55, revised upward from $1.31 90 days ago (and up from 2009 actual earnings of $0.94); and the consensus estimate for 2011 is $2.15, revised upward from $1.94 90 days ago. + Valuation: At 19 times next year's estimated earnings and a projected 5-year annualized earnings growth rate of 12%, the stock is at least priced within reason. + History of earnings surprises: This company has reported earnings-per-share at least 3c above estimates in each of the past three quarters, including the just-reported quarter cited above, which "beat the Street" by 12c. + The company's industry group ("Transportation - Truck") is ranked #22 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, Wednesday, July 28, 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.
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