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Market Stance: BEARISH (since March 3, 2018)
* 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, Monday, March 5, 2018, I bought XCRA, for both client and my personal accounts.
I bought a relatively small position, because I perceive higher-than-usual market risk at this time.
Here's why I bought this stock:
+ Technical: Trading volume every day since Feb 23 has exceeded the previous 10-month record, and yet the price has moved very little. The stock is trading in a narrow range, very near a 7-year high. In my opinion, this dramatic increase in volume near a resistance point suggests that an upside breakout may be in the offing.
+ Excellent recent sales growth. Here are the quarterly year-to-year sales growth rates from the last four quarters, in chronological order: +26%, +39%, +50%, and, most recently, for the quarter ended Jan 31, +38% to $110.3 million.
+ Excellent recent earnings-per-share growth. Here are the quarterly EPS figures for the last eight quarters:
Mar 17 vs Mar 16: 17c vs 1c Jun 17 vs Jun 16: 25c vs 14c Sep 17 vs Sep 16: 33c vs 1c Dec 17 vs Dec 16: 19c vs 7c
+ Strong and rising earnings-per-share estimates: According to recent data from First Call, the consensus earnings estimate for FY 18 (ends Jul 31) is 98c, revised upward from 28c 90 days ago (and up from FY 17 actual earnings of 49c); and the consensus estimate for FY 19 is $1.05, revised upward from 86c 90 days ago.
+ Valuation: At 9.5 times next year's estimated earnings and a projected 5-year annualized earnings growth rate of 16%, the stock is, by my usual metric, attractively priced.
+ History of earnings surprises: This company has reported earnings-per-share at least 2c above estimates in each of the past five quarters. Most recently, for the quarter ended Jan 31, they "beat the Street" by 2c.
+ The company's industry group ("Elec - Semiconductor Equip") is ranked #77 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.
-KD, Monday, March 5, 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, Monday, March 5, 2018, I sold IVV, for both client and my personal accounts.
I sold just enough IVV to pay for XCRA. We remain fully invested.
-KD, Monday, March 5, 2018
* Buy prices shown are net after commissions.
** Current prices are at least 20 minutes old.
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