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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, Tuesday, January 30, 2018, I bought EXTR, for both client and my personal accounts.
The news on this stock today is that it will join the S&P 600 Smallcap Index.
Here's why I bought this stock:
+ Breakout: The stock is up sharply this morning on heavy volume, breaking out of a 2-month range to a new 16-year high.
+ Volume spike, mostly on the buy side: As I write this, it is shortly past noon in New York, and volume is more than 3x the daily average, and is on track to 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: +6%, +19%, +28%, and, most recently, for the quarter ended Sep 30, +73% to $211.7 million.
+ Excellent recent earnings-per-share growth. Here are the quarterly EPS figures for the last eight quarters:
Dec 16 vs Dec 15: 12c vs 9c Mar 17 vs Mar 16: 10c vs 3c Jun 17 vs Jun 16: 17c vs 10c Sep 17 vs Sep 16: 16c vs 7c
+ Strong and rising earnings-per-share estimates: According to recent data from First Call, the consensus earnings estimate for FY 18 (ends Jun 30) is 75c, revised upward from 65c 90 days ago (and up from FY 17 actual earnings of 46c); and the consensus estimate for FY 19 is $1.10, revised upward from 74c 90 days ago.
+ Valuation: At 14 times next year's estimated earnings and a projected 5-year annualized earnings growth rate of 20%, the stock may still be, even after today's price jump, attractively priced.
+ History of earnings surprises: This company has reported earnings-per-share at least 2c above estimates in each of the past four quarters. Most recently, for the quarter ended Sep 30, they "beat the Street" by 2c.
+ The company's industry group ("Computer - Networking") is ranked #3 for relative strength out of 197 industry groups tracked by Investor's Business Daily. This ranking changes daily, and it has been generally stable to rising over recent weeks and months.
+ The stock's 200-day moving average is rising, indicating a long-term uptrend.
-KD, Tuesday, January 30, 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, Tuesday, January 30, 2018, I sold IVV, for both client and my personal accounts.
I sold IVV in order to pay for EXTR. We remain fully invested.
-KD, Tuesday, January 30, 2018
* Buy prices shown are net after commissions.
** Current prices are at least 20 minutes old.
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