The Deen's ListTM
A service of Deen Capital Management, Inc. (
Our goal: Outperform the S&P 500 in both up markets and down.
Our result: +62.8% for the 60 months ending February 14, 2018 (vs. +95.5% for the S&P)
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Vol.16 #28 Thursday, February 15, 2018 1:18PM EST

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Market Stance: BEARISH (since February 2, 2018)


Typical Client Performance
Bought SolarEdge Technologies, Inc. (SEDG)
Sold SPDR S&P 500 ETF (SPY) +1.6%
Typical Client Portfolio
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Typical Client Performance

Deen Capital S&P 500
Year-to-date as of February 14, 2018 +1.6% * +1.2%
12 months (Feb 14, 2017 to Feb 14, 2018) +16.2% * +17.6%
24 months (Feb 14, 2016 to Feb 14, 2018) +50.4% * +50.4%
36 months (Feb 14, 2015 to Feb 14, 2018) +31.4% * +36.5%
48 months (Feb 14, 2014 to Feb 14, 2018) +32.9% * +58.6%
60 months (Feb 14, 2013 to Feb 14, 2018) +63.6% * +95.5%

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

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Bought SolarEdge Technologies, Inc. (SEDG)

Initial percent of portfolio (approx.)5.0%
Net buy price in managed accounts*$44.80
Most recent close (Feb 14)$36.90
Net change (based on net buy price)+7.90
Today's volume as of 1:45PM EST3.3 million ($147.6 million)
Average daily volume675,300 ($30.3 million)
This year's earnings-per-share$2.12 (est)
Next year's earnings-per-share$1.99 (est)
P/E using next year's earnings22.5 (est)
Earnings growth rate, next 5 years-9% per year (est)

* Buy prices shown are net after commissions and fees.

Today, Thursday, February 15, 2018, I bought SEDG, for both client and my personal accounts.

Here's why I bought this stock:

+ Earnings surprise: Yesterday, Feb 14, after the close, the company announced results for the quarter ended Dec 31. Earnings came in at 85c per diluted share (vs 32c last year and analysts' consensus 65c). Revenue was up 70% to $189.3 million.

+ Breakout: The stock is up sharply this morning, breaking out of a 32-month range to a new all0time high.

+ Volume spike, mostly on the buy side: Volume is more than 4x the daily average, and, just 4 hours after the open, has already set a 6-month record.

+ Three quarters of excellent and accelerating recent sales growth. Here are the quarterly year-to-year sales growth rates from the last four quarters, in chronological order: -8%, +9%, +30%, and, most recently, for the quarter ended Dec 31, +70% to $189.3 million.

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

Mar 17 vs Mar 16: 36c vs 51c
Jun 17 vs Jun 16: 55c vs 44c
Sep 17 vs Sep 16: 66c vs 46c
Dec 17 vs Dec 16: 85c vs 32c

+ History of earnings surprises: This company has reported earnings-per-share at least 4c above estimates in each of the past four quarters, including the just-reported quarter cited above, which "beat the Street" by 20c.

+ The company's industry group ("Energy - Solar") is ranked #32 for relative strength out of 197 industry groups tracked by Investor's Business Daily. This ranking changes daily, and it has been generally rising over recent weeks and months.

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

I chose to buy this stock in spite of the following negative factors:

- Weak and falling earnings-per-share estimates: According to recent data from First Call, the consensus earnings estimate for 2018 is $2.12, revised downward from $2.20 90 days ago (and down from 2017 actual earnings of $2.43); and the consensus estimate for 2019 is $1.99, unchanged from 90 days ago. (This data pre-dates yesterday's surprise.)

- Analysts, prior to yesterday's earnings surprise, project negative earnings growth over the next five years.

-KD, Thursday, February 15, 2018

Sold SPDR S&P 500 ETF (SPY) +1.6%

Net sell price in managed accounts*$271.49
Date(s) boughtFeb 14 2018
Net buy price in managed accounts*$267.09
Holding period0.1 weeks
Gain/loss in managed accounts*+1.6% (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, February 15, 2018, I sold SPY, for both client and my personal accounts.

I sold just enough SPY to pay for SEDG. We remain fully invested.

-KD, Thursday, February 15, 2018

Typical Client Portfolio

Company Name Stock
% of
SolarEdge Technologies, Inc. SEDG 02/15/18 $44.80 $44.29 0.0 5.0% -1.1%
SPDR S&P 500 ETF SPY 02/14/18 $267.09 $271.43 0.1 95.0% +1.6%
Cash 0.0%  
Total 100%  

* Buy prices shown are net after commissions.

** Current prices are at least 20 minutes old.

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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.

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