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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.
* Buy prices shown are net after commissions and fees. Today, Monday, August 2, 2010, I bought DDIC, for both client and my personal accounts. DDi Corp., together with its subsidiaries, provides printed circuit board (PCB) engineering and manufacturing services, primarily in North America, for communications, computer, military, medical and industrial markets. Here's why I bought this stock: + News: Last Thursday, July 29, after the close, the company announced results for the quarter ended June 30. Earnings came in at 29c per diluted share (vs 2c last year and analysts' consensus 19c). Revenue was up 84% to $68.4 million (analysts' consensus $64.8 million). + Breakout: The stock is up sharply both Friday and today on heavy volume. As I write this, just minutes before the close, it looks like today's close will be a breakout from a 3-month trading range to a new multi-year high. + Volume spike, mostly on the buy side: Friday's volume was more than 5x average. Today's volume is more than 3x average. This is mostly buying volume. + Turnaround in recent sales growth. Here are the quarterly year-to-year sales growth rates from the last four quarters, in chronological order: -20%, -2%, +65%, and, most recently, for the quarter ended June 30, +84% to $68.4 million. + Excellent recent earnings-per-share growth. Here are the quarterly EPS figures for the last eight quarters:
Sep 09 vs Sep 08: 1c vs 8c Dec 09 vs Dec 08: 3c vs 8c Mar 10 vs Mar 09: 19c vs 3c Jun 10 vs Jun 09: 29c vs 2c + Strong and rising earnings-per-share estimates: According to recent data from First Call, the consensus earnings estimate for 2010 is 84c, revised upward from 80c 90 days ago (and up from 2009 actual earnings of 9c); and the consensus estimate for 2011 is $1.17, revised upward from $1.06 90 days ago. + Valuation: At 8 times next year's estimated earnings, the stock is attractively priced. (Projected 5-year earnings growth rate is not available on this little-known stock.) + History of earnings surprises: This company has reported earnings-per-share at least a penny above estimates in each of the past three quarters, including the just-reported quarter cited above, which "beat the Street" by 10c. + 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 - Contract Mfg") is ranked #177 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, Monday, August 2, 2010 Sold S&P Depositary Receipt (SPY) +2.8%
* 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, Monday, August 2, 2010, I sold SPY, for both client and my personal accounts. I sold off enough SPY to pay for DDIC, and also a little more, in anticipation of buying something else later this week. -KD, Monday, August 2, 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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