The Deen's ListTM
A service of Deen Capital Management, Inc. (www.deencapital.com)
Our goal: Outperform the S&P 500 in both up markets and down.
Our result: +68.7% for the 60 months ending January 4, 2018 (vs. +104.8% for the S&P)
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Vol.16 #2 Friday, January 5, 2018 11:21AM EST

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

Market Stance: BULLISH (since December 8, 2017)

Contents

Typical Client Performance
Bought Ultra Clean Holdings Inc. (UCTT)
Sold iShares Core S&P 500 (IVV) +1.9%
Typical Client Portfolio
Subscription Information
Privacy Policy
Disclaimers
Contact Us

Typical Client Performance

Deen Capital S&P 500
Year-to-date as of January 4, 2018 +1.3% * +1.9%
12 months (Jan 4, 2017 to Jan 4, 2018) +18.2% * +22.2%
24 months (Jan 4, 2016 to Jan 4, 2018) +41.5% * +40.8%
36 months (Jan 4, 2015 to Jan 4, 2018) +28.0% * +40.4%
48 months (Jan 4, 2014 to Jan 4, 2018) +28.6% * +60.8%
60 months (Jan 4, 2013 to Jan 4, 2018) +69.4% * +104.8%

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

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Click here for information on managed accounts.

Bought Ultra Clean Holdings Inc. (UCTT)

Initial percent of portfolio (approx.)9.1%
Net buy price in managed accounts*$23.52
Most recent close (Jan 04)$23.63
Net change (based on net buy price)-0.11
Today's volume as of 11:22AM EST292,321 ($6.9 million)
Average daily volume1.5 million ($35.3 million)
This year's earnings-per-share$2.32 (est)
Next year's earnings-per-share$2.54 (est)
P/E using next year's earnings9.3 (est)
Earnings growth rate, next 5 years20% per year (est)

* Buy prices shown are net after commissions and fees.

Today, Friday, January 5, 2018, I bought UCTT, for both client and my personal accounts.

Here's why I bought this stock:

+ Technical buy signal: This stock is in a long-term uptrend, but it has been weak since peaking in mid-October. It was up sharply on heavy volume on both Dec 29 and Jan 2. Volume on Jan 2 set a 12-month record. But the price is still well off its October highs. I view this as a technical buy signal. Our buy price today is in-between the Dec 29 and the Jan 2 closing prices.

+ Excellent recent sales growth. Here are the quarterly year-to-year sales growth rates from the last four quarters, in chronological order: +69%, +82%, +76%, and, most recently, for the quarter ended Sep 30, +66% to $242.6 million.

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

Dec 16 vs Dec 15: 36c vs (1c)
Mar 17 vs Mar 16: 47c vs (1c)
Jun 17 vs Jun 16: 62c vs 10c
Sep 17 vs Sep 16: 62c vs 17c

+ Strong and rising earnings-per-share estimates: According to recent data from First Call, the consensus earnings estimate for 2017 is $2.32, revised upward from $2.29 90 days ago (and up from 2016 actual earnings of 63c); and the consensus estimate for 2018 is $2.54, revised upward from $2.41 90 days ago.

+ Valuation: At 9 times next year's estimated earnings and a projected 5-year annualized earnings growth rate of 20%, the stock is, by my usual metric, attractively priced.

+ History of earnings surprises: This company has reported earnings-per-share at least 2c above estimates in five of the past six quarters.

+ 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 factors:

- Most recently, for the quarter ended Sep 30, earnings came in 2c per share shy of estimates.

- The company's industry group ("Elec - Semiconductor Equip") is ranked #53 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, Friday, January 5, 2018

Sold iShares Core S&P 500 (IVV) +1.9%

Net sell price in managed accounts*$274.36
Date(s) boughtDec 27 2017
Net buy price in managed accounts*$269.29
Holding period1.3 weeks
Gain/loss in managed accounts*+1.9% (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, Friday, January 5, 2018, I sold IVV, for both client and my personal accounts.

I sold just enough IVV to pay for UCTT. We remain fully invested.

-KD, Friday, January 5, 2018

Typical Client Portfolio

Company Name Stock
Symbol
Buy
Date
NetBuy
Price*
Current
Price**
Weeks
Held
% of
Portfolio
Gain
(Loss)
Ultra Clean Holdings Inc. UCTT 01/05/18 $23.52 $23.56 0.0 9.1% +0.2%
YY Inc. ADS YY 01/02/18 $121.40 $124.88 0.4 9.2% +2.9%
Mesabi Trust MSB 01/02/18 $26.90 $27.55 0.4 9.2% +2.4%
iShares Core S&P 500 IVV 12/29/17 $269.64 $274.46 1.0 34.5% +1.8%
iShares Core S&P 500 IVV 12/28/17 $269.58 $274.46 1.1 9.7% +1.8%
iShares Core S&P 500 IVV 12/27/17 $269.29 $274.46 1.3 0.2% +1.9%
SPDR S&P 500 ETF SPY 12/08/17 $265.44 $272.44 4.0 28.2% +2.6%
Cash 0.1%  
Total 100%  

* Buy prices shown are net after commissions.

** Current prices are at least 20 minutes old.

Subscription Information

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Disclaimers

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.

The information contained herein has been compiled from sources deemed to be reliable; however, we are not responsible for its accuracy or completeness.

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