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: +68.0% for the 60 months ending March 6, 2018 (vs. +95.0% for the S&P)
For complete performance data, click here
Vol.16 #46 Wednesday, March 7, 2018 12:11PM EST

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

Market Stance: BULLISH (since March 5, 2018)


Typical Client Performance
Bought Medifast Inc. (MED)
Sold iShares Core S&P 500 (IVV) -1.9%
Typical Client Portfolio
Subscription Information
Privacy Policy
Contact Us

Typical Client Performance

Deen Capital S&P 500
Year-to-date as of March 6, 2018 +3.8% * +2.4%
12 months (Mar 6, 2017 to Mar 6, 2018) +17.3% * +17.0%
24 months (Mar 6, 2016 to Mar 6, 2018) +48.0% * +41.8%
36 months (Mar 6, 2015 to Mar 6, 2018) +32.8% * +39.7%
48 months (Mar 6, 2014 to Mar 6, 2018) +29.9% * +57.0%
60 months (Mar 6, 2013 to Mar 6, 2018) +67.7% * +95.0%

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

Click here for more performance data.

Click here for information on managed accounts.

Bought Medifast Inc. (MED)

Initial percent of portfolio (approx.)5.5%
Net buy price in managed accounts*$91.27
Most recent close (Mar 06)$67.51
Net change (based on net buy price)+23.76
Today's volume as of 12:11PM EST661,116 ($60.3 million)
Average daily volume85,800 ($7.8 million)
This year's earnings-per-share$2.75 (est)
Next year's earnings-per-share$3.34 (est)
P/E using next year's earnings27.3 (est)
Earnings growth rate, next 5 years15% per year (est)

* Buy prices shown are net after commissions and fees.

Today, Wednesday, March 7, 2018, I bought MED, for both client and my personal accounts.

Here's why I bought this stock:

+ Earnings surprise: Yesterday, Mar 6, after the close, the company announced results for the quarter ended Dec 31. Earnings came in at 60c per diluted share (vs 34c last year and analysts' consensus 48c). Revenue was up 25% to $78.0 million (analysts' consensus $73.4 million).

+ A "true surprise"*: For six weeks prior to the news, the stock price was mostly edging lower. Now, this morning, it is soaring on extremely heavy volume.

* "True surprise" is my term to describe a company news item that ignites heavy buying and that was not preceded by a short-term run-up in the stock price (i.e. not preceded by rumor).

+ Breakout: This morning's price jump represents a breakout from a 3-month range to a new all-time high.

+ Volume spike, mostly on the buy side: As I write this, it is noon on Wall Street, and volume is already 6 times the daily average, and has already set a 12-month record.

+ Three quarters of excellent and accelerating sales growth. Here are the quarterly year-to-year sales growth rates from the last four quarters, in chronological order: -2%, +6%, +13%, and, most recently, as cited above, +25% to $78.0 million.

+ Recent earnings-per-share growth. Here are the quarterly EPS figures for the last eight quarters:

Mar 17 vs Mar 16: 51c vs 42c
Jun 17 vs Jun 16: 63c vs 63c
Sep 17 vs Sep 16: 55c vs 51c
Dec 17 vs Dec 16: 60c vs 34c

+ Strong and rising earnings-per-share estimates: According to recent data from First Call, the consensus earnings estimate for 2018 is $2.75, revised upward from $2.53 90 days ago (and up from 2017 actual earnings of $2.29); and the consensus estimate for 2019 is $3.34.

+ 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 12c.

+ The company's industry group ("Cosmetics / Personal Care") is ranked #94 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:

- Valuation: At 27 times next year's estimated earnings and a projected 5-year annualized earnings growth rate of 15%, the stock is, by my usual metric, a bit over-priced.

-KD, Wednesday, March 7, 2018

Sold iShares Core S&P 500 (IVV) -1.9%

Net sell price in managed accounts*$273.81
Date(s) boughtFeb 27 2018
Net buy price in managed accounts*$279.07
Holding period1.1 weeks
Gain/loss in managed accounts*-1.9% (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, Wednesday, March 7, 2018, I sold IVV, for both client and my personal accounts.

I sold IVV in order to pay for MED. We remain fully invested.

-KD, Wednesday, March 7, 2018

Typical Client Portfolio

Company Name Stock
% of
Medifast Inc. MED 03/07/18 $91.27 $91.23 0.0 5.5% -0.0%
Xcerra Corp. XCRA 03/05/18 $9.95 $10.23 0.3 5.1% +2.8%
Upland Software Inc. UPLD 03/05/18 $27.31 $27.18 0.3 5.0% -0.5%
SPDR S&P 500 ETF SPY 03/02/18 $266.69 $271.82 0.7 84.4% +1.9%
Cash 0.1%  
Total 100%  

* Buy prices shown are net after commissions.

** Current prices are at least 20 minutes old.

Subscription Information

Welcome to The Deen's ListTM, an e-mail stock newsletter from Deen Capital Management, Inc.

My intention is to inform you as quickly as is practical regarding my stock market moves.

Your feedback is welcome. Send e-mail to To subscribe or unsubscribe, include the word "subscribe" or "unsubscribe" in the Subject line.

This newsletter is free to managed account clients. For a limited time, it is also free to all interested parties.

Privacy Policy

Your personal information, including your e-mail address, will be held in strict confidence by Deen Capital Management, Inc. We will not share it with or sell it to others.


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.

Contact Us

The Deen's List
PO Box 30925
Santa Barbara, CA 93130
(800) 353-4990

Copyright © 2018 Deen Capital Management, Inc.