Directed Electronics (DIEX)

DEIX

June 19, 2008

I normally offer a great company for my stock of the week for all of you looking for advice on how to invest. But this time around, I want to give you a stock I think is one of the worst on Wall Street. And it's not just to keep you from backing a dud of a company – I want to show you how to invest responsibly, and how you can avoid other companies that are also on the path to financial ruin.

Directed Electronics Inc. (DEIX) is a disaster of a stock. The company designs and markets home theater speakers, vehicle security and remote-start systems, and mobile audio and video systems. DEIX had 2008 revenues of $60.5 million in the first quarter of 2008, or 60.2% below the prior year's 1Q quarter results! Directed Electronics also posted revenue 8.4% below the prior year's results. The company has anemic sales growth, poor cash flow and an overall gloomy outlook!

Some of you may be saying, "That makes sense, though. Who buys all those pricey electronics when times are tough?" Well if that were the case, why is Apple (AAPL) still soaring? The iPod and iPhone maker has given my Blue Chip Growth growth subscribers 527.94% returns since we bought it more than three years ago, and I still recommend it as a buy! Or take Research in Motion (RIMM), the makers of the BlackBerry, which has given my Blue Chip Growth subscribers gains of 220.77% in about a year! The difference between these companies is in the numbers. Apple and RIMM have shown great sales growth, earnings growth and return on equity. DEIX has not.

Now you may be saying. "Oh, OK. But how much time does your average investor have to spend crunching numbers to figure that out?" Years ago, it would have been a daunting task indeed. But lucky for you, my comprehensive PortfolioGrader Pro tool ranks eight fundamental factors for thousands of stocks and gives you easy-to-read results in the form of letter grades. Apple and Research in Motion get A's and B's across the board. Directed Electronics gets a C, a D, and then all F's!

You can browse the best and worst stocks in specific sectors, or input your own personal portfolio to see how your investments rank! PortfolioGrader Pro is completely free–you just have to register with this Website, and you'll have no obligation to buy anything from me.

But if you put your investments into PortfolioGrader Pro and see some average or failing marks, you may want to consider joining my Blue Chip Growth service. If a stock is any less than an A grade, it doesn't make the cut. That's why we beat the market 3-to-1 year after year! Join Blue Chip Growth for 6 months 100% risk-free -- you'll be glad you did.