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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 GT Solar International, Inc. (SOLR)
* Buy prices shown are net after commissions and fees. Today, Thursday, August 5, 2010, I bought SOLR, for both client and my personal accounts. GT Solar International, Inc. manufactures specialized equipment for the production of photovoltaic wafers, cells and modules, and polysilicon. Here's why I bought this stock: + Earnings surprise: Yesterday, after the close, the company announced results for the quarter ended June 30. Earnings came in at 11c per diluted share (vs 5c last year and analysts' consensus 4c). Revenue was up 88% to $135.2 million (analysts' consensus $73.1 million). + The stock is up sharply this morning on extremely heavy volume. Two hours after the opening bell, volume is already more than 5 times the daily average. + Turnaround in recent sales growth. Here are the quarterly year-to-year sales growth rates from the last four quarters, in chronological order: -26%, -15%, +41%, and, most recently, as cited above, +88%. + Turnaround in recent earnings-per-share growth. Here are the quarterly EPS figures for the last eight quarters:
Sep 09 vs Sep 08: 6c vs 19c Dec 09 vs Dec 08: 25c vs 30c Mar 10 vs Mar 09: 23c vs 13c Jun 10 vs Jun 09: 11c vs 5c + Valuation: At 11 times next year's estimated earnings and a projected 5-year annualized earnings growth rate of 50%, the stock is still, even after this morning's big gain, very attractively priced. + History of earnings surprises: This company has reported earnings-per-share at least 4c above estimates in each of the past three quarters, including the just-reported quarter cited above, which "beat the Street" by 7c. + The company's industry group ("Energy - Solar") is ranked #83 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. I chose to buy the stock in spite of the following negative factors: - This earnings news is not a "true surprise", because the stock has been trending higher since mid-July. - Strong but not consistently rising earnings-per-share estimates: According to recent data from First Call, the consensus earnings estimate for FY 11 (ends March 31) is 64c, revised upward from 60c 90 days ago (and up from FY 10 actual earnings of 60c); but the consensus estimate for FY 12 is 74c, revised downward from 79c 90 days ago. -KD, Thursday, August 5, 2010 Sold Cirrus Logic Inc. (CRUS) +9.2%
* 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, Thursday, August 5, 2010, I sold CRUS, for both client and my personal accounts. This sell may well be premature, but I chose to cash in on our excellent two-week, 9% gain because of the chart pattern, which might possibly turn into a double top here. -KD, Thursday, August 5, 2010 Sold Old Dominion Freight (ODFL) -7.7%
* 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, Thursday, August 5, 2010, I sold ODFL, for both client and my personal accounts. I had a sell signal at Tuesday's close on this stock from my proprietary StockSell Program. This signal is based purely on technical analysis. I did not sell yesterday because yesterday was an up day. But this morning, the stock is giving back yesterday's gains and then some. File this under Keep Losses Small! -KD, Thursday, August 5, 2010 Sold S&P Depositary Receipt (SPY) +2.5%
* 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, Thursday, August 5, 2010, I sold SPY, for both client and my personal accounts. I am selling a little SPY this morning in order to have cash on hand to buy more individual stocks. Also to take some profits after yesterday's big gain. -KD, Thursday, August 5, 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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