Ken Deen's THE AGGRESSIVE TRADER(tm) "Seeking double-digit profits in one to four months" BUY ALERT P.O. Box 4791 Vol. 1, No. 95 Santa Barbara, CA 93140 October 19, 1992 (805) 565-2039 6:40am EDT CompuServe: 72020,2050 Stock+Options Account (editor's personal account): * Today I bought 250 Justin Industries Inc. (JSTN) at 31. Stock-Only Account (editor's personal account): * Today I bought 200 Justin Industries Inc. (JSTN) at 31. DESI(tm) Account (a computer-simulated hypothetical account): No trades DESI(tm) Buy/Sell Signals: None BUY Justin Industries Inc. (JSTN) Here is another very powerful buy signal. There is a very good chance I will get a DESI(tm) buy signal on this stock tonight from my computerized system. If I do, I will send out a second buy alert tonight or tomorrow morning. Whether it is a DESI(tm) buy or not, I am recommending it strongly. I have this morning invested about $14,000 of my own money in this one, more even than Media Logic. That's the most money I've committed to a single stock in recent memory, perhaps ever. My sense of the market is that now is the time to step on the gas! In the Stock+Options Account, this purchase is entirely on margin. On Friday, we had a powerful confluence of technical and fundamental buy signals. On the technical side, we have a sudden breakout to the upside on very high volume from a five-and-a-half month trading range. This is a very powerful technical buy signal. It is perhaps my favorite chart pattern. After five and a half months of bouncing around in a trading range between $23 and $28, suddenly, in one day of very heavy trading (Friday), the price breaks out dramatically. When this kind of breakout occurs on the day or the day after a superb earnings surprise, then we have plenty of fuel to power a sustained rally. Such was the case here. The market was reacting to third quarter earnings of 54 cents, 135% better than the year-ago quarter. Here are the excellent sales and earnings figures for the past four quarters: Quarter Ended Sales($mil) Earnings-per-share ----- ------------------- ------------------ Sep 30 112.9 vs 91.5 +23% .54 vs .23 +135% Jun 30 104.5 vs 86.5 +21% .38 vs .12 +217% Mar 31 97.3 vs 73.8 +32% .23 vs -.10 n/a Dec 31 116.6 vs 102.8 +13% .39 vs .21 +86% As a result of the excellent jump in trailing earnings, the P/E has dropped from 22 in the recent past to 20 now. Even at 22, the stock is a bargain. The company is in the top 1% of all companies in terms of 5-year earnings- per-share growth, and in the top 4% in terms of relative strength, according to Investor's Business Daily. The stock belongs to the "shoes and related apparel" group; the group relative strength ranking has risen from 69 on Sept. 11 to 89 on Oct. 9. This means that the group is outperforming the market. Justin Industries, with headquarters in Fort Worth, Texas, manufactures brick and concrete building products, evaporative coolers, and western footwear. ---------------------------------------------------------------------------- *** To all who download this newsletter *** I invite you to send me your CompuServe ID to receive these alerts by e-mail. You will get them faster. I do not charge for this service. In addition, I invite you to send me your paper mail address. I will then send you a paper mailing once a month. This is the only way to receive the monthly status reports, which are chock-full of informative charts, graphs, and tables. I pay the postage. The monthly paper mailings also include hardcopy with stock charts of these buy/sell alerts. -Ken Deen ---------------------------------------------------------------------------- This issue of The Aggressive Trader(tm) may be copied and distributed freely. Please pass it around! The Aggressive Trader is edited and published at irregular intervals, but at least monthly, by Kenneth L. Deen ("Ken Deen"), P.O. Box 4791, Santa Barbara, California 93140, (805) 565-2039. Ken Deen, his 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 Kenneth L. Deen. Copyright (c) 1992 Kenneth L. Deen. -END-