DEIX

[eliteG]

DEIX - Directed Electronics

Sector:    Consumer Goods
Industry:    Electronic Equipment
Mkt Cap:       422.56 Million
ShrsOut:       24.77 Million
Float:           11.49 Million

Profile:  Directed Electronics is the largest designer and marketer of consumer branded vehicle security and convenience systems in the United States based on sales and a major supplier of home audio, mobile audio and video, and satellite radio products.

website: http://www.directed.com/


The Story, Fundamentals and News

DEIX had its IPO(Initial Public Offering) in December 2005 and since mid-february it has been on a path upwards.

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On March 30 they beat the street:

Directed Electronics Posts 4Q Loss
Thursday March 30, 5:29 pm ET
Directed Electronics Inc. Posts Fourth-Quarter Loss, Adjusted Results Beat Street Estimates
http://biz.yahoo.com/ap/060330/earns_directed_electronics.html?.v=1

Highlights include:

-Quarter Sales jumped 69 percent to $135.5 million from last year's $80.1 million.
-Year sales rose 60 percent to $304.6 million from $189.9 million a year ago
-For 2006, the company said it expects earnings of 97 cents to $1 per share, and sales to grow by 15 percent to 20 percent.

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If DEIX makes $1 per share the forward PE comes in around 17!  A steep discount considering the industry avg PE is 25.  The current price to sales ratio is a nice 1.34 with the industry avg at 1.61.  Strong growth, undervalued and now getting popular:

NASDAQ TV Commercials Feature Directed Electronics
Friday April 7, 11:00 am ET
http://biz.yahoo.com/prnews/060407/laf004.html?.v=49

Technicals

Now thatsa spicy meatball!

Longer:


Shorter:



DEIX has the power combo!  Strong growth making it undervalued at current levels and a powerful chart ready to explode into blue skies.  Welcome to the portolio DEIX.

We will but DEIX @ market open.

[signpro]

What price did you get?  I was pretty close to picking the top . . . 17.28 for me 

[eliteG]

We got it at 17.21.. down with the rest of the market today but this play is solid 

[eliteG]

update DEIX:

Rough start to this fine play, But its solid.. we'll be ok.    Need to setup a stop, Just in case we drop.

We will hold DEIX unless it closes below 15.85.

[eliteG]

update DEIX:

Doesn't matter how good the financials look.. if the market is going down its taking some of the pretty ones with it.  DEIX still looks ok but I wish we had a prettier start.  We are changing the exit to a stop.

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Position: bought DEIX @ 17.21 on 4/10/2006
Order: Hold
Exit: stop @ 15.67
Target: n/a
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[eliteG]

update DEIX:

DEIX had a good week and is now above its 9 and 20 ema.. lets see if it can build up some momentum and start higher.  Sort of a rough triangulation(triangle consolidation) and it seems the market will decide if DEIX can punch higher or not.


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Position: bought DEIX @ 17.21 on 4/10/2006
Order: Hold
Exit: stop @ 15.67
Target: n/a
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[eliteG]

update DEIX:

DEIX remains above our stop but has been very quiet.  We are not willing to wait much longer for a price move although the stock seems undervalued.  For now we will hold.  Same stop.  Come on! 

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Position: bought DEIX @ 17.21 on 4/10/2006
Order: Hold
Exit: stop @ 15.67
Target: n/a
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[eliteG]

update DEIX:

DEIX is finally moving up and volume is coming in.  Tomorrow could be a great day as we go green on this trade.  A rapid move to 20 may be in store.  Time to move our stop higher.

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Position: bought DEIX @ 17.21 on 4/10/2006
Order: Hold
Exit: stop @ 15.98
Target: n/a
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[healey]

G
A question about stops....I know if you can't watch all day they are good, protects you from major catastrophes and unseen press releases. But some stocks seem to get pushed down, (DEIX for example) the stops get taken and and then reverses (MM's manipulation..fact or fiction?). Its a sad thing to come home and see your stock sold and then look at the chart and see that you got caught in a 1-5 min push/tumble and that it is now above your sell and rising. I hate being a sitting duck...is there any other way of protecting ones self?? I am sure I all ready know the answer to this. But I would like to hear your thoughts and ideas on this.
Cheers

[eliteG]

G
A question about stops....I know if you can't watch all day they are good, protects you from major catastrophes and unseen press releases. But some stocks seem to get pushed down, (DEIX for example) the stops get taken and and then reverses (MM's manipulation..fact or fiction?). Its a sad thing to come home and see your stock sold and then look at the chart and see that you got caught in a 1-5 min push/tumble and that it is now above your sell and rising. I hate being a sitting duck...is there any other way of protecting ones self?? I am sure I all ready know the answer to this. But I would like to hear your thoughts and ideas on this.
Cheers

I agree it is a tough thing to get taken out like that.. the only other way I can think of is to evaluate after the stock closes but this of course leaves you susceptable to a major move..

The truth is that on a great play the stop(a well placed one) will not become an issue.. we place our stops normally where the technical pattern breaks down so even if the stock recovers somewhat.. it is most likely damaged and we do not want to waste our time with it.  You pay a price for this protection but most of the time its worth it.

Thanks for bringing up this issue Healey. 

[eliteG]

Trade Closed DEIX
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Begin: bought DEIX @ 17.21 on 4/10/2006
End: sold DEIX @ 15.88 on 05/09/2006
Gain(Loss): -(7.00)%
Trading Days: 22
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Trade Notes:

-We bought this stock right when it reversed(4/10)
-continued to fall to 16 support
-the p/r was quiet and volume never came in
-stock traded sideways
-price moved up with some volume but was never excited
-stop hit and we take home -7%

Boring trade.. perhaps thats the problem on this.  A relatively new issue should not get so quiet on volume.  No matter what kind of value you may think you have on a stock it must be noticed for it to climb.  DEIX wasted our time but the loss is manageable.. we got knocked out but the stock formed a hammer right at the 50day.. a good one to watch for a move from here if volume starts chugging.