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Market Stance: BULLISH (since March 5, 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 UPLD, for both client and my personal accounts.
Here's why I bought this stock:
+ Breakout: Today, the stock is up sharply on heavy volume, breaking out of a six-and-a-half-month trading range to a new all-time high.
+ Volume spike, mostly on the buy side: Today's volume, a half hour before the close, is already 8 times average.
+ Excellent recent sales growth. Here are the quarterly year-to-year sales growth rates from the last four quarters, in chronological order: +10%, +18%, +25%, and, most recently, for the quarter ended Sep 30, +35% to $26.1 million.
+ Excellent recent earnings-per-share growth. Here are the quarterly EPS figures for the last eight quarters:
Mar 17 vs Mar 16: 12c vs (2c) Jun 17 vs Jun 16: 16c vs (1c) Sep 17 vs Sep 16: 25c vs 6c Dec 17 vs Dec 16: 25c vs 11c
Valuation: At 22 times next year's estimated earnings and a projected 5-year annualized earnings growth rate of 20%, the stock is, by my usual metric, reasonably priced.
+ History of earnings surprises: This company has reported earnings-per-share at least 8c above estimates in each of the past two quarters. Most recently, for the quarter ended Sep 30, they "beat the Street" by 8c.
+ The company's industry group ("Computer Software - Enterprise") is ranked #5 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 the stock in spite of the following negative factor:
- Strong but falling earnings-per-share estimates for next year: According to recent data from First Call, the consensus earnings estimate for 2017 is 93c, unchanged upward from 90 days ago (and up from 2016 actual earnings of 29c); and the consensus estimate for 2018 is 93c, unchanged from 90 days ago.
-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 SPY 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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