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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 18, 2018, I bought ICHR, for both client and my personal accounts.
Here's why I bought this stock:
+ News: Yesterday, Jan 17, before the open, the company said in an 8-K filing that revenue for the fourth quarter of 2017 (to be announced officially on or about Feb 9), will be approximately $183 million. Analysts' consensus is $182.3 million. They also said that they expect revenue for the first quarter of this year to be in the $240 to $250 million range. The analysts' consensus is $234.5 million.
+ A "true surprise"*: Prior to the news, the stock was near a 4-month low. Then, yesterday, the stock jumped 20% on very heavy volume.
* "True surprise" is my term to describe a company news item that ignites heavy buying and that was not preceded by a short-term run-up in the stock price (i.e. not preceded by rumor).
+ Excellent recent sales growth. Here are the quarterly year-to-year sales growth rates from the last four quarters, in chronological order: +104%, +103%, +67%, and, most recently, for the quarter ended Sep 30, +56% to $164.5 million.
+ Excellent recent earnings-per-share growth. Here are the quarterly EPS figures for the last eight quarters:
Dec 16 vs Dec 15: 50c vs 1c Mar 17 vs Mar 16: 57c vs 19c Jun 17 vs Jun 16: 60c vs 29c Sep 17 vs Sep 16: 62c vs 35c
+ Strong and rising earnings-per-share estimates: According to recent data from First Call, the consensus earnings estimate for 2017 is $2.46, revised upward from $3.45 90 days ago (and up from 2016 actual earnings of $1.34); and the consensus estimate for 2018 is $3.52, revised upward from $2.92 90 days ago.
+ Valuation: At 9 times next year's estimated earnings and a projected 5-year annualized earnings growth rate of 48%, the stock is, by my usual metric, attractively priced.
+ 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 ("Elec - Semiconductor Eqp") is ranked #87 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, January 18, 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 18, 2018, I sold IVV, for both client and my personal accounts.
I sold just enough IVV to pay for ICHR. We remain fully invested.
-KD, Thursday, January 18, 2018
* Buy prices shown are net after commissions.
** Current prices are at least 20 minutes old.
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