The Deen's ListTM
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Our goal: Outperform the S&P 500 in both up markets and down.
Our result: +13.9% for the 60 months ending February 3, 2016 (vs. +61.6% for the S&P)
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Vol.14 #22 Thursday, February 4, 2016 11:55AM EST

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Market Stance: BEARISH (since January 4, 2016)


Typical Client Performance
Bought SolarEdge Technologies, Inc. (SEDG)
Typical Client Portfolio
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Typical Client Performance

Deen Capital S&P 500
Year-to-date as of February 3, 2016 -5.6% * -6.3%
12 months (Feb 3, 2015 to Feb 3, 2016) -8.0% * -4.8%
24 months (Feb 3, 2014 to Feb 3, 2016) -7.0% * +14.2%
36 months (Feb 3, 2013 to Feb 3, 2016) +13.1% * +34.0%
48 months (Feb 3, 2012 to Feb 3, 2016) +11.3% * +54.0%
60 months (Feb 3, 2011 to Feb 3, 2016) +13.6% * +61.6%

* An average of managed accounts, net after all commissions and fees.

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Bought SolarEdge Technologies, Inc. (SEDG)

Initial percent of portfolio (approx.)9.2%
Net buy price in managed accounts*$29.70
Most recent close (Feb 03)$27.44
Net change (based on net buy price)+2.26
Today's volume as of 12:06pm EST2.9 million ($85.2 million)
Average daily volume1.1 million ($32.0 million)
This year's earnings-per-share$1.50 (est)
Next year's earnings-per-share$2.05 (est)
P/E using next year's earnings14.5 (est)
Earnings growth rate, next 5 years24% per year (est)
Corporate HeadquartersHerziliya Pituach, Israel

* Buy prices shown are net after commissions and fees.

Today, Thursday, February 4, 2016, I bought SEDG, for both client and my personal accounts.

SolarEdge Technologies, Inc. is an Israel-based manufacturer of DC optimized inverter systems, solar power harvesting and photovoltaic (PV) monitoring solutions.

Here's why I bought this stock:

+ Earnings surprise: Yesterday, Feb 3, after the close, the company announced results for the quarter ended Dec 31. Earnings came in at 44c per diluted share (vs 12c last year and analysts' consensus 36c). Revenue was up 70% to $124.8 million (analysts' consensus $119.5 million).

+ Mini-breakout: If the stock closes above $29.49, that will be a breakout from a 4-week range to a new 4-month high. We bought at $29.69.

+ Volume spike, mostly on the buy side: This morning's trading volume is heavy, already more than twice the daily average as I write this (shortly before noon on Wall Street), and on track to set a 12-month record.

+ Excellent recent sales growth. Here are the quarterly year-to-year sales growth rates from the last four quarters, in chronological order: +183%, +121%, +72%, and, most recently, as cited above, +70%.

+ Excellent recent earnings-per-share growth. Here are the quarterly EPS figures for the last eight quarters:

Dec 14 vs Dec 13: 20c vs (13c)
Mar 15 vs Mar 14: 31c vs  (7c)
Jun 15 vs Jun 14: 36c vs   7c
Sep 15 vs Sep 14: 44c vs  12c

+ Strong and rising earnings-per-share estimates for next year: According to recent data from First Call, the consensus earnings estimate for FY 16 (ends Jun 30) is $1.50, unchanged from 90 days ago (and up from FY 15 actual earnings of 70c); and the consensus estimate for FY 17 is $2.05, revised upward from $1.95 90 days ago.

+ Valuation: At 15 times next year's estimated earnings and a projected 5-year annualized earnings growth rate of 23%, the stock may still be, even after this morning's price jump, attractively priced.

+ History of earnings surprises: This company has reported earnings-per-share at least 6c above estimates in each of the past four quarters, including the just-reported quarter cited above, which "beat the Street" by 8c.

+ The company's industry group ("Energy - Solar") is ranked #6 for relative strength out of 197 industry groups tracked by Investor's Business Daily. This ranking changes daily, and it has been generally rising over recent weeks and months.

+ The stock's 200-day moving average is rising, indicating a long-term uptrend.

-KD, Thursday, February 4, 2016

Typical Client Portfolio

Company Name Stock
% of
SolarEdge Technologies, Inc. SEDG 02/04/16 $29.70 $29.61 0.0 9.0% -0.3%
Fabrinet FN 02/02/16 $28.01 $28.82 0.3 9.6% +2.9%
John B Sanfilippo & Son Inc. JBSS 01/29/16 $59.11 $63.26 0.9 9.4% +7.0%
Facebook, Inc. FB 01/28/16 $106.35 $110.21 1.0 9.3% +3.6%
Cray Inc. CRAY 01/27/16 $37.58 $38.86 1.1 9.3% +3.4%
Cash 53.3%  
Total 100%  

* Buy prices shown are net after commissions.

** Current prices are at least 20 minutes old.

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