|
Please read carefully our disclaimers at the end of this newsletter. Market Stance: BULLISH (since September 1, 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 G-III Apparel Group, Ltd (GIII)
* Buy prices shown are net after commissions and fees. Today, Wednesday, September 1, 2010, I bought GIII, for both client and my personal accounts. G-III Apparel Group, Ltd. makes men's and women's coats, jackets, pants and other sportswear items under licensed and proprietary brands. As of January 31, 2010, they operated 121 retail stores in 35 U.S> states, of which 118 are outlet stores operated under the Wilsons Leather name. Here's why I bought this stock: + Huge earnings surprise: This morning, before the open, the company announced results for the quarter ended July 31. Earnings came in at 15c per diluted share (vs a loss of 17c last year and analysts' consensus of a loss of 2c). Revenue was up 39% to $189.0 million (analysts' consensus $161.9 million). + A "true surprise"*: For 3 weeks prior to the news, the stock had been trading near the low end of a 5-month range. Then, this morning, it is soaring on extremely heavy volume. * "True surprise" is my term to describe a company news item that ignites heavy buying and that was not preceded by a short-term run-up in the stock price (i.e. not preceded by rumor). + Volume spike, mostly on the buy side: As I write this, a little more than two-and-a-half hours after the opening bell, volume is already some 4.5 times the daily average. + Excellent recent sales growth. Here are the quarterly year-to-year sales growth rates from the last four quarters, in chronological order: +3%, +14%, +43%, and, most recently, as cited above, +39%. + Mostly excellent recent earnings-per-share growth. Here are the quarterly EPS figures for the last eight quarters:
Sep 09 vs Sep 08: $1.87 vs $1.68 Dec 09 vs Dec 08: $0.40 vs ($0.23) Mar 10 vs Mar 09: ($0.07) vs ($0.41) Jun 10 vs Jun 09: 0.15 vs ($0.17) + Strong and rising earnings-per-share estimates: According to recent data from First Call, the consensus earnings estimate for FY 11 (ends Jan 31) is $2.33, revised upward from $2.17 90 days ago (and up from FY 10 actual earnings of $1.74); and the consensus estimate for FY 12 is $2.69, revised upward from $2.42 90 days ago. + Valuation: At 10.5 times next year's estimated earnings and a projected 5-year annualized earnings growth rate of 17.5%, the stock is still, even after yesterday's big gain, very attractively priced. + History of earnings surprises: This company has reported earnings-per-share at least 9c above estimates in each of the past six quarters, including the just-reported quarter cited above, which "beat the Street" by 19c. + 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 ("Apparel - Clothing Mfg") is ranked #112 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, Wednesday, September 1, 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. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||