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Market Stance: BULLISH (since December 8, 2017)
* An average of managed accounts, net after all commissions and fees.
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* 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
* 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
* Buy prices shown are net after commissions.
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