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. 111 Santa Barbara, CA 93140 November 20, 1992 (805) 565-2039 10:00am New York Time CompuServe: 72020,2050 Stock+Options Account (editor's personal account): * BUY 100 Read Rite Corp. (NASDAQ: RDRT). This morning I bought 100 RDRT at 29 3/4. Stock-Only Account (editor's personal account): No trades DESI(tm) Account (a computer-simulated hypothetical account): No trades DESI(tm) Buy/Sell Signals (computer-generated): None Read Rite Corp. The story here is an extremely under-valued growth company with strong earnings growth and explosive sales growth, a group which is gaining favor on the Street, and a technical breakout this week on high volume from a 9-month base. First, let's look at the latest four quarters of sales and earnings growth: Quarter Ended Sales($mil) Earnings-per-share --------- ------------------ ----------------- Dec 31 91 67.8 vs 29.0 +134% 0.48 vs 0.31 +62% Mar 31 92 94.2 vs 37.4 +152% 0.40 vs 0.31 +76% Jun 30 92 105.6 vs 50.1 +111% 0.37 vs 0.21 +29% Sep 30 92 121.8 vs 60.6 +101% 0.34 vs 0.21 +55% The earnings growth, while very good, is not as powerful as I usually like to see. However, sales growth is nothing short of phenomenal, and sales growth is one of my favorite indicators of future earnings potential. At 18.6 times trailing earnings, this stock is seriously under-valued. Bargain hunters need look no further! Also, the stock's industry group, "Computer memory devices", has been gaining favor on the Street. The group's relative strength ranking has risen from 54 on Nov. 6 to 81 today (on a scale of 1 to 99), according to Investor's Business Daily. What about the technical breakout? Monday's close at 30 was a new all-time high, the first all-time closing high since February 5, when the stock closed at 29 1/8. The stock reached 29 1/8 again on Sept. 21, but retreated from that resistance level. The stock now appears poised to make a new run. Trading volume has increased substantially this week as the stock is passing through the resistance level, another bullish technical sign. The stock carries an earnings-per-share ranking of 81, and a relative strength ranking of 91, according to Investor's Business Daily. The next earnings report is due on Jan. 23. Read Rite Corp., headquartered in Milpitas, California, is a leading independent supplier of thin film magnetic recording heads for disk drives. ---------------------------------------------------------------------------- *** 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-