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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 Spreadtrum Communications (SPRD)
* Buy prices shown are net after commissions and fees. Today, Thursday, September 2, 2010, I bought SPRD, for both client and my personal accounts. Spreadtrum Communications, Inc., is a Chinese designer of baseband and RF processors and chips used in wireless handsets. Here's why I bought this stock: + Breakout: Two days ago, Tuesday, Aug 31, this stock soared 13% on huge volume. This move was a breakout from a 3-month trading range to a new 24-month high. + Volume spike, mostly on the buy side: Tuesday's volume was more than 6x average, and set a 12-month record. + Excellent recent sales growth. Here are the quarterly year-to-year sales growth rates from the last four quarters, in chronological order: +92%, +313%, +534%, and, most recently, for the quarter ended June 30, +341% to $71.4 million. + Excellent recent earnings-per-share growth. Here are the quarterly EPS figures for the last eight quarters:
Sep 09 vs Sep 08: 5c vs (10c) Dec 09 vs Dec 08: 6c vs (33c) Mar 10 vs Mar 09: 17c vs (17c) Jun 10 vs Jun 09: 34c vs (16c) + Strong and rising earnings-per-share estimates: According to recent data from First Call, the consensus earnings estimate for 2010 is $0.97, revised upward from $0.91 90 days ago (and up from 2009 loss of 21c); and the consensus estimate for 2011 is $1.29, revised upward from $1.08 90 days ago. + Valuation: At 9 times next year's estimated earnings and a projected 5-year annualized earnings growth rate of 25%, the stock is still, even after this week's big gain, very attractively priced. + 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 - Semiconductor Fabless") is ranked #34 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, Thursday, September 2, 2010 Sold S&P Depositary Receipt (SPY) +2.4%
* 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, September 2, 2010, I sold SPY, for both client and my personal accounts. I sold just enough SPY to pay for SPRD plus a little more to fund my next buy ... whatever that might be. -KD, Thursday, September 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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