Ken Deen's THE AGGRESSIVE TRADER(tm) "Seeking double-digit profits in one to four months" Vol. 2 No.57 April 1, 1993 12:00pm New York Time ********** Market Stance: Cautiously Bullish ********** ANNOUNCEMENTS: * Volume 2 #58 will be the Monthly Status Report covering performance through the end of February. It will be mailed in about one week. * Volume 2 #59 will be the Monthly Status Report covering performance through the end of March. It will be mailed in three to four weeks. ********** CORRECTION: In Volume 2 #53 (March 26, 1993) I stated that I purchased 200 shares of Copley Pharmaceutical (NASDAQ: CPLY) in my Marginable Account and another 200 shares in my IRA Account. The number of shares was a typo. In fact, I purchased 300 shares in each Account. ********** ALERT ITEMS: Market Commentary: See Below Marginable Account: No trades IRA Account: No trades DESI(tm) Account (a computer-simulated hypothetical account): No trades DESI(tm) Buy/Sell Signals (computer-generated): None Other Strong Recomendations: * Recoton Corp. (NASDAQ: RCOT, $21.13) EPS:86, RS:90, GR:39->5, PE:19, Audio/Video Home Products ********** TRADING IDEAS: (These are NOT buy recommendations. They are merely suggestions for your further research.) Breakouts (The following stock(s) have excellent sales and earnings growth, and have just broken out from a six-week or longer base.): * Apple South Inc. (NASDAQ: APSO, $19.00) EPS:99, RS:97, GR:61->103, PE:43, Retail-Food & Restaurants * Just Toys Inc. (NASDAQ: JUST, $18.25) EPS:88, RS:85, GR:155->174, PE:17, Toys/Games/Hobby Products * Xylogics Inc. (NASDAQ: XLGX, $20.25) EPS:94, RS:95, GR:18->42, PE:32, Computer Peripheral Equipment * International Game Technology (NYSE: IGT, $32.75) EPS:99, RS:93, GR:27->6, PE:26, Leisure & Recreation-Gaming ********** Recoton Corp. This is a strong buy. The story here is a technical breakout following a strong earnings surprise about three weeks ago. The group is gaining favor rapidly, the P/E is low, and the company's growth is fast and accelerating. Here are the last four quarters of sales and earnings growth: Quarter Ended Sales($mil) Earnings-per-share --------- ---------------- ------------------- Mar 31 92 14.5 vs 12.3 +18% 0.24 vs 0.15 +0.09 Jun 30 92 15.1 vs 12.1 +25% 0.22 vs 0.12 +0.10 Sep 30 92 18.3 vs 15.4 +19% 0.28 vs 0.19 +0.09 Dec 31 92 28.8 vs 18.5 +56% 0.40 vs 0.21 +0.19 On March 12, the stock shot up 2 1/4 points to 20 1/4 on more than triple normal volume in response to earnings news. The stock closed yesterday at an all-time high of 21 1/8. The stock has bounced off of resistance at 20 to 21 several times over the past few months. It closed at 20 1/4 as far back as Dec. 3 of last year. Therefore, the stock is not overbought or extended; it is poised to make a good run from here. At 19, the P/E is well under half the recent growth rate, one of my pet criteria. Finally, the industry group (Audio/Video Home Products) is gaining favor dramatically. The group ranks 5th out of 199 groups this week for 6-month price performance; that's way up from 101st place on Jan. 6, less than three months ago. Recoton, located in Long Island City, NY (718-392-6442), markets accessory products for home video and audio equipment, telephones, TV antennas, and personal computers. All rankings in today's Alert are from Investor's Business Daily. ********** Previous Alert: Vol.2 #53 (March 26, 1993) ********** *** To all who download this newsletter *** On May 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 April 30, 1993, I am offering at-cost subscriptions (very very inexpensive) by e-mail, fax, and postal mail. These are alternatives to downloading. E-mail via Internet is free during this trial period. Monthly Status Reports (available in printed form only) are an essential adjunct to these timely bulletins. Among other things, they review the stock holdings and historical performance of each newsletter account. To receive a free sample Monthly Status Report plus an at-cost subscription form, just send your paper mail address. -Ken Deen ********** 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. CompuServe: 72020,2050 Internet: 72020.2050@compuserve.com 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. -END-