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The Aggressive Trader Vol. 2, No. 35
Ken Deen's
THE AGGRESSIVE TRADER(tm)
"Seeking double-digit profits in one to four months"
ALERT
Vol. 2, No. 35 P.O. Box 4791
February 25, 1993 Santa Barbara, CA 93140
10:50am New York Time CompuServe: 72020,2050
(805) 565-2039 Internet: 72020.2050@compuserve.com
Market Stance: Bearish
*** ALERT ITEMS: ***
Marginable Account (editor's personal account):
* SELL 50 Cummins Engine Co. (NYSE: CUM).
Today I sold all 50 shares at 85 5/8. I had bought these shares Feb.
12 at 85 1/8 (Vol.2 #28)
After this trade, the account value is $37,498. Of that, $33,810 is
long stocks and $3,688 is cash.
IRA Account (editor's personal account):
* SELL 50 Cummins Engine Co. (NYSE: CUM).
Today I sold all 50 shares at 85 5/8. I had bought these shares Feb.
12 at 85 1/8 (Vol.2 #28)
After this trade, the account value is $40,984. Of that, $31,848 is
long stocks and $9,136 is cash.
*** TRADING IDEA ITEMS (There will be no followup on these ideas): ***
Breakouts (The following stock(s) have excellent sales and earnings growth,
and have just broken out from a six-week or longer base.):
* Applied Materials Inc. (NASDAQ: AMAT, $39.38)
EPS:95, RS:86, GR:7->5(*), PE:31, Electronic Components - Semiconductors
Climactic Selloff/Rebounds (The following stock(s) have excellent sales and
earnings growth, are in long-term uptrends, and have just had a climactic
selloff-and-rebound.):
* Advanta Corp. Class A (NASDAQ: ADVNA, $34.75)
EPS:99, RS:81, GR:34->70(*), PE:42, Financial/Business Services
* Chrysler Corp. (NYSE: C, $38.50)
EPS:68, RS:94, GR:103->34(*), PE:26, Automobile - Mfg (Vol.1 #71)
* Outback Steakhouse Inc. (NASDAQ: OSSI, $26.00)
EPS:99, RS:73, GR:27->65(*), PE:51, Retail - Food & Restaurants
* Data Race Inc. (NASDAQ: RACE, $20.13)
EPS:99, RS:54, GR:12->14(*), PE:20, Computer Periph Eqpmt (Vol.2 #14)
* Healthsource Inc. (NYSE: HS, $28.88)
EPS:95, RS:59, GR:8->145(*), PE:21, Medical-Health Maint. Org.
Cummins Engine Co.
I am continuing to adjust my portfolio in the wake of my shift to a
bearish market stance on Feb. 17 (see Vol.2 #30). As I have written before,
my market timing program gives a market sell signal about once a year.
When it does, my goal is no longer a "double-digit profit in one to four
months" for the stocks I bought prior to the sell signal; my goal becomes
"preservation of capital", or "damage control". I'd rather be in cash at
this time. Yesterday's market action was very constructive, but my proprie-
tary market timing program remains bearish.
I am taking advantage of the recent rise in Cummins stock to raise some
cash at a breakeven price on this recent purchase.
Announcement: (*) Improved Group Ranking
The manner in which group strength is reported has recently changed. Every
Wednesday, Investor's Business Daily lists all 197 industry groups (plus
the S&P 500 and S&P Industrial indices) ranked in order of percent change
over the prior six months. This ranking is on a scale of 1 to 199, with
#1 being the best performing group and #199 the worst.
An entry, for example, of
GR:37->28, ..., Computer Software
means that the ranking of the Computer Software group is 28, as of the most
recent Wednesday. The first number, 37, is the average rank over the
preceding eight Wednesdays. From this information, one may infer that the
computer software group is performing well (28 is a relatively low number on
the 1-to-199 scale), and also that the software group appears to be gaining
favor (28 is an improvement over the prior 8-week average of 37).
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Previous Alert: Vol.2 #33 (Feb. 23, 1993)
"Trading Ideas" (less important). You may elect to receive Alerts only, or
both Alerts and Trading Ideas.
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*** To all who download this newsletter ***
On April 1, 1993, this newsletter will be available only for a
subscription fee. There will be no further uploads on or after that date.
From now through March 31, 1993, I am offering at-cost subscriptions (very
very inexpensive) by e-mail, fax, and postal mail. These are alternatives
to downloading. Also, Monthly Status Reports are available in printed form
only. These are chock-full of informative charts, graphs, and tables
reviewing newsletter performance and explaining the DESI(tm) System. I
invite you to send me your postal mail address so that I may send you a
Monthly Status Report and an at-cost subscription form. -Ken Deen
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The Aggressive Trader is edited and published at irregular intervals, but
at least monthly, by Deen Capital Management, Inc., P.O. Box 4791, Santa
Barbara, California 93140, (805) 565-2039.
Deen Capital Management, Inc., its principals, employees, affiliates,
and/or clients may have positions in securities recommended herein and may
make additional purchases and/or sales in these securities.
Recommendations made in this publication involve a high degree of risk and
may result in losses. Readers should not assume that recommendations will be
profitable or will equal past performance. The information in this
publication is collected from sources believed to be reliable, but neither the
accuracy nor the completeness of this information is guaranteed.
The Aggressive Trader, Deen Earnings Surprise Index, DESI, and DESI-3 are
all trademarks of Deen Capital Management, Inc.
Copyright (c) 1993 Deen Capital Management, Inc.
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