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: +69.2% for the 60 months ending January 10, 2018 (vs. +105.8% for the S&P)
For complete performance data, click here
Vol.16 #6 Thursday, January 11, 2018 3:50PM EST

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

Market Stance: BULLISH (since December 8, 2017)

Contents

Typical Client Performance
Bought Forward Air Corp. (FWRD)
Sold iShares Core S&P 500 (IVV) +3.0%
Typical Client Portfolio
Subscription Information
Privacy Policy
Disclaimers
Contact Us

Typical Client Performance

Deen Capital S&P 500
Year-to-date as of January 10, 2018 +1.7% * +2.8%
12 months (Jan 10, 2017 to Jan 10, 2018) +19.3% * +23.4%
24 months (Jan 10, 2016 to Jan 10, 2018) +44.6% * +48.7%
36 months (Jan 10, 2015 to Jan 10, 2018) +30.6% * +42.6%
48 months (Jan 10, 2014 to Jan 10, 2018) +27.9% * +61.3%
60 months (Jan 10, 2013 to Jan 10, 2018) +70.2% * +105.8%

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

Click here for more performance data.

Click here for information on managed accounts.

Bought Forward Air Corp. (FWRD)

Initial percent of portfolio (approx.)9.1%
Net buy price in managed accounts*$60.50
Most recent close (Jan 10)$59.20
Net change (based on net buy price)+1.30
Today's volume as of 4:00PM EST399,828 ($24.2 million)
Average daily volume139,900 ($8.5 million)
This year's earnings-per-share$2.32 (est)
Next year's earnings-per-share$2.75 (est)
P/E using next year's earnings22.0 (est)
Earnings growth rate, next 5 years13% per year (est)

* Buy prices shown are net after commissions and fees.

Today, Thursday, January 11, 2018, I bought FWRD, for both client and my personal accounts.

Here's why I bought this stock:

+ Breakout: Three days ago, on Monday, Jan 8, the stock was up sharply on heavy volume. This was a breakout from a 34-month range to a new 24-year high.

Tuesday and Wednesday, the stock gave back some of those gains on profit-taking. Today, the stock is up again, again on heavy volume.

+ Solid recent sales growth. Here are the quarterly year-to-year sales growth rates from the last four quarters, in chronological order: +3%, +8%, +12%, and, most recently, for the quarter ended Sep 30, +12% to $280.2 million.

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

Dec 16 vs Dec 15: 58c vs 61c
Mar 17 vs Mar 16: 47c vs 43c
Jun 17 vs Jun 16: 64c vs 57c
Sep 17 vs Sep 16: 58c vs 51c

+ Strong and rising earnings-per-share estimates for next year: According to recent data from First Call, the consensus earnings estimate for 2017 is $2.32, revised downward from $2.35 90 days ago (but up from 2016 actual earnings of $2.08); and the consensus estimate for 2018 is $2.75, revised upward from $2.63 90 days ago.

Valuation: At 22 times next year's estimated earnings and a projected 5-year annualized earnings growth rate of 13%, the stock may not be a bargain, but is, in my opinion, priced within reason.

+ History of earnings surprises: This company has reported earnings-per-share at least 3c above estimates in each of the past three quarters. Most recently, for the quarter ended Sep 30, they "beat the Street" by 6c.

- The company's industry group ("Transportation - Truck") 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 fairly stable over recent weeks and months.

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

-KD, Thursday, January 11, 2018

Sold iShares Core S&P 500 (IVV) +3.0%

Net sell price in managed accounts*$277.70
Date(s) boughtDec 27 2017; Dec 28 2017
Net buy price in managed accounts*$269.57
Holding period2.1 weeks
Gain/loss in managed accounts*+3.0% (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, January 11, 2018, I sold IVV, for both client and my personal accounts.

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

-KD, Thursday, January 11, 2018

Typical Client Portfolio

Company Name Stock
Symbol
Buy
Date
NetBuy
Price*
Current
Price
Weeks
Held
% of
Portfolio
Gain
(Loss)
Forward Air Corp. FWRD 01/11/18 $60.50 $60.39 0.0 9.1% -0.2%
SPDR S&P 500 ETF SPY 01/10/18 $273.76 $275.66 0.1 27.0% +0.7%
iShares Core S&P 500 IVV 12/29/17 $269.64 $277.68 1.9 34.7% +3.0%
iShares Core S&P 500 IVV 12/28/17 $269.58 $277.68 2.0 0.8% +3.0%
SPDR S&P 500 ETF SPY 12/08/17 $265.44 $275.66 4.9 28.4% +3.9%
Cash 0.0%  
Total 100%  

* Buy prices shown are net after commissions.

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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