The Deen's ListTM
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Our goal: Outperform the S&P 500 in both up markets and down.
Our result: +19.9% for the 60 months ending May 25, 2016 (vs. +75.0% for the S&P)
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Vol.14 #117 Thursday, May 26, 2016 10:31AM EDT

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Market Stance: BULLISH (since May 24, 2016)


Typical Client Performance
Bought Dycom Industries Inc. (DY)
Sold SPDR S&P 500 ETF (SPY) +1.1%
Typical Client Portfolio
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Typical Client Performance

Deen Capital S&P 500
Year-to-date as of May 25, 2016 -4.5% * +3.2%
12 months (May 25, 2015 to May 25, 2016) -11.6% * +0.4%
24 months (May 25, 2014 to May 25, 2016) -1.7% * +14.4%
36 months (May 25, 2013 to May 25, 2016) +9.6% * +34.4%
48 months (May 25, 2012 to May 25, 2016) +23.9% * +71.8%
60 months (May 25, 2011 to May 25, 2016) +19.9% * +75.0%

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

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Bought Dycom Industries Inc. (DY)

Initial percent of portfolio (approx.)10.0%
Net buy price in managed accounts*$83.20
Most recent close (May 25)$82.30
Net change (based on net buy price)+0.90
Today's volume as of 10:31am EDT361,929 ($30.1 million)
Average daily volume537,300 ($44.7 million)
This year's earnings-per-share$4.04 (est)
Next year's earnings-per-share$4.92 (est)
P/E using next year's earnings16.9 (est)
Earnings growth rate, next 5 years34% per year (est)
Corporate HeadquartersPalm Beach Gardens, FL

* Buy prices shown are net after commissions and fees.

Today, Thursday, May 26, 2016, I bought DY, for both client and my personal accounts.

Dycom Industries, Inc. provides engineering, construction, maintenance and installation services to telecommunications providers.

Here's why I bought this stock:

+ Earnings surprise: The day before yesterday, Tuesday, after the close, the company announced results for the quarter ended April 30. Earnings came in at $1.08 per diluted share (vs 58c last year and analysts' consensus 74c). Revenue was up 35% to $664.7 million (analysts' consensus $597.8 million).

+ Market reaction: The stock was up sharply yesterday on very heavy volume.

+ Volume spike, mostly on the buy side: Yesterday's volume was almost 7 times average,and set a 12-month record.

+ Excellent and accelerating recent sales growth. Here are the quarterly year-to-year sales growth rates from the last four quarters, in chronological order: +20%, +29%, +27%, and, most recently, as cited above, +35%.

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

Jul 15 vs Jul 14: $0.97 vs $0.48
Oct 15 vs Oct 14: $1.24 vs $0.59
Jan 16 vs Jan 15: $0.54 vs $0.27
Apr 16 vs Apr 15: $1.08 vs $0.58

+ Strong and rising earnings-per-share estimates: According to recent data from First Call, the consensus earnings estimate for FY 16 (ends July 2016) is $4.04, revised upward from $3.88 90 days ago (and up from FY 15 actual earnings of $2.41); and the consensus estimate for FY 17 is $4.92, revised upward from $4.65 90 days ago.

+ Valuation: At 17 times next year's estimated earnings and a projected 5-year annualized earnings growth rate of 34%, the stock may still be, even after yesterday's price jump, attractively priced.

+ History of earnings surprises: This company has reported earnings-per-share at least 9c above estimates in each of the past seven quarters, including the just-reported quarter cited above, which "beat the Street" by 34c.

+ The company's industry group ("Telecom - Infrastructure") is ranked #91 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.

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

-KD, Thursday, May 26, 2016

Sold SPDR S&P 500 ETF (SPY) +1.1%

Net sell price in managed accounts*$209.11
Date(s) boughtMay 16 2016
Net buy price in managed accounts*$206.89
Holding period1.4 weeks
Gain/loss in managed accounts*+1.1% (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, May 26, 2016, I sold SPY, for both client and my personal accounts.

We sold just enough SPY to pay for DY. We remain fully invested.

-KD, Thursday, May 26, 2016

Typical Client Portfolio

Company Name Stock
% of
Dycom Industries Inc. DY 05/26/16 $83.20 $84.50 0.0 10.2% +1.6%
BioTelemetry Inc. BEAT 05/24/16 $16.09 $16.85 0.3 9.4% +4.7%
iShares Core S&P 500 IVV 05/20/16 $206.72 $210.40 0.9 50.4% +1.8%
Electronic Arts Inc. EA 05/20/16 $73.86 $74.61 0.9 9.1% +1.0%
SPDR S&P 500 ETF SPY 05/16/16 $206.89 $209.29 1.4 10.7% +1.2%
NVIDIA Corp. NVDA 05/13/16 $40.05 $45.40 1.9 10.1% +13.4%
Cash 0.1%  
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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