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: +68.1% for the 60 months ending March 2, 2018 (vs. +95.3% for the S&P)
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Vol.16 #43 Monday, March 5, 2018 10:04AM EST

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Market Stance: BEARISH (since March 3, 2018)


Typical Client Performance
Bought Xcerra Corp. (XCRA)
Sold iShares Core S&P 500 (IVV) -3.3%
Typical Client Portfolio
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Typical Client Performance

Deen Capital S&P 500
Year-to-date as of March 2, 2018 +2.5% * +1.0%
12 months (Mar 2, 2017 to Mar 2, 2018) +16.1% * +15.1%
24 months (Mar 2, 2016 to Mar 2, 2018) +46.4% * +40.8%
36 months (Mar 2, 2015 to Mar 2, 2018) +28.9% * +34.8%
48 months (Mar 2, 2014 to Mar 2, 2018) +32.3% * +56.4%
60 months (Mar 2, 2013 to Mar 2, 2018) +67.7% * +95.3%

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

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Bought Xcerra Corp. (XCRA)

Initial percent of portfolio (approx.)5.0%
Net buy price in managed accounts*$9.96
Most recent close (Mar 02)$9.98
Net change (based on net buy price)-0.02
Today's volume as of 10:41AM EST315,154 ($3.1 million)
Average daily volume669,500 ($6.7 million)
This year's earnings-per-share$0.98 (est)
Next year's earnings-per-share$1.05 (est)
P/E using next year's earnings9.5 (est)
Earnings growth rate, next 5 years16% per year (est)

* 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

Sold iShares Core S&P 500 (IVV) -3.3%

Net sell price in managed accounts*$269.79
Date(s) boughtFeb 27 2018
Net buy price in managed accounts*$279.07
Holding period0.9 weeks
Gain/loss in managed accounts*-3.3% (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, 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

Typical Client Portfolio

Company Name Stock
% of
Xcerra Corp. XCRA 03/05/18 $9.96 $9.99 0.0 5.1% +0.3%
SPDR S&P 500 ETF SPY 03/02/18 $266.69 $268.32 0.4 84.4% +0.6%
iShares Core S&P 500 IVV 02/27/18 $279.07 $270.29 0.9 10.5% -3.1%
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.

The information contained herein has been compiled from sources deemed to be reliable; however, we are not responsible for its accuracy or completeness.

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