The Deen's ListTM
A service of Deen Capital Management, Inc. (www.deencapital.com)
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)
For complete performance data, click here
Vol.16 #45 Monday, March 5, 2018 3:27PM EST

Please read carefully our disclaimers at the end of this newsletter.

Market Stance: BULLISH (since March 5, 2018)

Contents

Typical Client Performance
Bought Upland Software Inc. (UPLD)
Sold iShares Core S&P 500 (IVV) -2.4%
Typical Client Portfolio
Subscription Information
Privacy Policy
Disclaimers
Contact Us

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) +17.8% * +15.1%
24 months (Mar 2, 2016 to Mar 2, 2018) +48.6% * +40.8%
36 months (Mar 2, 2015 to Mar 2, 2018) +30.8% * +34.8%
48 months (Mar 2, 2014 to Mar 2, 2018) +34.2% * +56.4%
60 months (Mar 2, 2013 to Mar 2, 2018) +70.2% * +95.3%

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

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Click here for information on managed accounts.

Bought Upland Software Inc. (UPLD)

Initial percent of portfolio (approx.)5.0%
Net buy price in managed accounts*$27.30
Most recent close (Mar 02)$24.29
Net change (based on net buy price)+3.01
Today's volume as of 3:27PM EST1.4 million ($37.9 million)
Average daily volume162,700 ($4.4 million)
This year's earnings-per-share$0.93 (est)
Next year's earnings-per-share$1.26 (est)
P/E using next year's earnings21.7 (est)
Earnings growth rate, next 5 years20% per year (est)

* 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

Sold iShares Core S&P 500 (IVV) -2.4%

Net sell price in managed accounts*$272.23
Date(s) boughtFeb 27 2018
Net buy price in managed accounts*$279.07
Holding period0.9 weeks
Gain/loss in managed accounts*-2.4% (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 SPY to pay for XCRA. We remain fully invested.

-KD, Monday, March 5, 2018

Typical Client Portfolio

Company Name Stock
Symbol
Buy
Date
NetBuy
Price*
Current
Price**
Weeks
Held
% of
Portfolio
Gain
(Loss)
Xcerra Corp. XCRA 03/05/18 $9.96 $10.00 0.0 5.0% +0.5%
Upland Software Inc. UPLD 03/05/18 $27.30 $27.27 0.0 5.0% -0.1%
SPDR S&P 500 ETF SPY 03/02/18 $266.69 $272.48 0.4 84.5% +2.2%
iShares Core S&P 500 IVV 02/27/18 $279.07 $274.48 0.9 5.5% -1.6%
Cash 0.0%  
Total 100%  

* Buy prices shown are net after commissions.

** Current prices are at least 20 minutes old.

Subscription Information

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Privacy Policy

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Disclaimers

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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