The Deen's ListTM
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Our goal: Outperform the S&P 500 in both up markets and down.
Our result: +13.0% for the 60 months ending March 9, 2016 (vs. +66.5% for the S&P)
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Vol.14 #55 Thursday, March 10, 2016 2:58PM EST

Please read carefully our disclaimers at the end of this newsletter.

Market Stance: BULLISH (since February 22, 2016)


Typical Client Performance
Bought Universal Electronics Inc. (UEIC)
Sold Fabrinet (FN) -7.9%
Typical Client Portfolio
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Typical Client Performance

Deen Capital S&P 500
Year-to-date as of March 9, 2016 -5.5% * -2.2%
12 months (Mar 9, 2015 to Mar 9, 2016) -12.6% * -2.4%
24 months (Mar 9, 2014 to Mar 9, 2016) -11.4% * +10.2%
36 months (Mar 9, 2013 to Mar 9, 2016) +10.6% * +36.0%
48 months (Mar 9, 2012 to Mar 9, 2016) +9.6% * +57.2%
60 months (Mar 9, 2011 to Mar 9, 2016) +11.6% * +66.5%

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

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Bought Universal Electronics Inc. (UEIC)

Initial percent of portfolio (approx.)10.0%
Net buy price in managed accounts*$64.21
Most recent close (Mar 09)$57.83
Net change (based on net buy price)+6.38
Today's volume as of 3:05pm EST759,571 ($48.8 million)
Average daily volume102,000 ($6.5 million)
This year's earnings-per-share$3.35 (est)
Next year's earnings-per-share$3.80 (est)
P/E using next year's earnings16.9 (est)
Earnings growth rate, next 5 years15% per year (est)
Corporate HeadquartersSanta Ana, CA

* Buy prices shown are net after commissions and fees.

Today, Thursday, March 10, 2016, I bought UEIC, for both client and my personal accounts.

Universal Electronics Inc. markets pre-programmed universal wireless controls and A/V accessories to enhance home entertainment systems.

Here's why I bought this stock:

+ News: This morning, before the open, the company announced a new warrants agreement with Comcast.

+ Market reaction: The stock is up sharply on very heavy volume. It is close to breaking out of a 12-month range to a new all-time high.

+ Volume spike, mostly on the buy side: Volume so far is some 7 times the daily average, and has already set a 12-month record.

+ Improving recent sales growth. Here are the quarterly year-to-year sales growth rates from the last four quarters, in chronological order: +2%, +1%, +9%, and, most recently, for the quarter ended Dec 31, +17% to $162.1 million.

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

Mar 15 vs Mar 14: 46c vs 40c
Jun 15 vs Jun 14: 67c vs 66c
Sep 15 vs Sep 14: 78c vs 80c
Dec 15 vs Dec 14: 91c vs 70c

+ Strong earnings-per-share estimates: According to recent data from First Call, the consensus earnings estimate for 2016 is $3.35, revised upward from $3.33 90 days ago (and up from 2015 actual earnings of $2.79); and the consensus estimate for 2017 is $3.80.

+ Valuation: At 17 times next year's estimated earnings and a projected 5-year annualized earnings growth rate of 15%, the stock may still be, even after today's price jump, attractively priced.

+ For the most recent quarter, ended Dec 31, earnings "beat the Street" by 6c.

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

I chose to buy the stock in spite of the following negative factor:

- The company's industry group ("Consumer Products - Electronic") is ranked #186 for relative strength out of 197 industry groups tracked by Investor's Business Daily. This ranking changes daily, and it has been generally falling over recent weeks and months.

-KD, Thursday, March 10, 2016

Sold Fabrinet (FN) -7.9%

Net sell price in managed accounts*$26.69
Date(s) boughtFeb 24 2016
Net buy price in managed accounts*$28.98
Holding period2.1 weeks
Gain/loss in managed accounts*-7.9% (after commissions)

* Buy and sell prices shown are net after commissions and fees. This means that the gain/loss shown is also net after transaction expenses.

Today, Thursday, March 10, 2016, I sold FN, for both client and my personal accounts.

I still like FN, but I sold today for purely short-term technical reasons. It is trading below my stop loss price of $27.35.

-KD, Thursday, March 10, 2016

Typical Client Portfolio

Company Name Stock
% of
Universal Electronics Inc. UEIC 03/10/16 $64.21 $64.07 0.0 10.0% -0.2%
MaxLinear, Inc. MXL 03/10/16 $17.55 $17.14 0.0 9.9% -2.3%
SolarEdge Technologies, Inc. SEDG 03/08/16 $27.24 $26.70 0.3 9.0% -2.0%
Smith & Wesson Holding Corp. SWHC 03/04/16 $27.17 $27.91 0.9 9.3% +2.7%
Fox Factory Holding Corp. FOXF 03/03/16 $16.86 $17.39 1.0 9.5% +3.2%
ExlService Holdings EXLS 03/03/16 $48.24 $48.17 1.0 6.6% -0.1%
Anika Therapeutics ANIK 03/02/16 $46.23 $44.18 1.1 8.8% -4.4%
John Bean Technologies Corp. JBT 02/29/16 $52.83 $53.67 1.4 9.8% +1.6% Inc. STMP 02/26/16 $118.14 $116.05 1.9 8.9% -1.8%
Cooper-Standard Holdings Inc CPS 02/25/16 $72.97 $76.20 2.0 9.2% +4.4%
Texas Roadhouse Inc. TXRH 02/24/16 $41.48 $42.03 2.1 9.0% +1.3%
Cash 0.2%  
Total 100%  

* Buy prices shown are net after commissions.

** Current prices are at least 20 minutes old.

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All stocks discussed in The Deen's ListTM involve a high degree of risk. It should not be assumed that any stock discussed in The Deen's ListTM or purchased by Deen Capital Management, Inc. will be profitable.

Past performance is not necessarily indicative of future results.

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