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. 113 Santa Barbara, CA 93140 November 24, 1992 (805) 565-2039 10:00am New York Time CompuServe: 72020,2050 Stock+Options Account (editor's personal account): No trades Stock-Only Account (editor's personal account): * BUY Nature's Bounty Inc. (NASDAQ: NBTY). This morning I bought 300 NBTY at 15 3/4. DESI(tm) Account (a computer-simulated hypothetical account): No trades DESI(tm) Buy/Sell Signals (computer-generated): None Other Trading Ideas: * BUY Jan Bell Marketing, Inc. (AMEX: JBM, $21.00). Nature's Bounty, Inc. I am enthusiastic about Nature's Bounty. It is not a DESI buy candidate, but in my opinion it is a stronger buy than some other stocks which are DESI buy candidates. This company was a DESI stock once, just very recently. The stock more than doubled between the DESI buy signal on August 3 and the DESI sell signal on November 11. It has emerged as a leader in the roaring bull market now underway in the NASDAQ. It has made a stunning 20-fold move in the past 12 months. (That's not a misprint. An investment of $1,000 in Nature's Bounty a year ago would be worth about $20,000 today.) I had thought that the stock was getting ahead of itself, as the P/E soared into the mid-40's. However, after seeing the blowout earnings report released yesterday, suddenly the stock looks like a bargain again! Overnight, trailing 12-month earnings doubled from 27 cents to 54 cents. The P/E last Friday, when the stock closed at 12 3/4, was rather high at 47. Then came Monday (yesterday). Earnings were announced, and the stock soared 2 1/4 points on 6 times average volume. Yet the jump in earnings swamped the rise in price, resulting in a much more reasonable P/E of 28 at the end of the day. Here are the last four quarters of sales and earnings. Notice the acceleration in both sales and earnings growth: Quarter Ended Sales($mil) Earnings-per-share --------- ------------------ ------------------- Dec 31 91 19.3 vs 15.5 +25% 0.03 vs 0.03 0% Mar 31 92 28.7 vs 21.2 +35% 0.13 vs 0.09 +44% Jun 30 92 24.1 vs 17.8 +35% 0.10 vs 0.05 +100% Sep 30 92 28.8 vs 19.1 +51% 0.28 vs 0.01 +2700% Nature's Bounty is in the "Medical Products" group. This group has been gaining favor on the Street. The group relative strength ranking has improved from 75 four weeks ago to 80 on Monday. Nature's Bounty carries an earnings-per-share ranking of 99 and a relative strength ranking of 99 (the highest possible). Nature's Bounty, located in Bohemia, New York, manufactures vitamins, food supplements, and health and beauty aids. Jan Bell Marketing, Inc. In Jan Bell, we see strong and accelerating sales and earnings growth, the completion of a short-term dip on a stock that is on a roll, and a stock group that is dramatically gaining favor. Earnings-per-share over the last four quarters were up +58%, +67%, +100%, and, most recently, +280%. Sales gains over those same quarters were +18%, +49%, +50%, and +47%. The stock has been on a roll for the past two months. On Sept. 29, the stock traded for $13.25. Yesterday's close was $21. The stock price has taken a slight dip just in the last week-and-a-half, from its high of $21.63 on Nov. 11. I expect the strong uptrend to resume, probably today. The stock's P/E, when looking at trailing earnings, is rather high at 39. However, the price is only 15 times estimated '93 earnings. In my opinion, the stock is still attractive in spite of the recent runup. Jan Bell is in the "Precious Metals/Jewelry" stock group. This group has been very hot lately. The group's relative strength ranking has shot up from 44 five weeks ago to 81 yesterday. The stock's earnings-per-share ranking is 92, and its relative strength ranking is 86. The next earnings report is due March 5. Jan Bell, located in Sunrise, Florida, designs, manufactures, merchandises and distributes a full line of diamond, gemstone, 14 karat gold, and other jewelry. All rankings in today's alert (earnings-per-share, relative strength, and group relative strength) are from Investor's Business Daily. ---------------------------------------------------------------------------- *** 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-