Please read carefully our disclaimers at the end of this newsletter.
Market Stance: BULLISH (since April 10, 2018)
* An average of managed accounts, net after all commissions and fees.
Click here for more performance data.
Click here for information on managed accounts.
* Buy prices shown are net after commissions and fees.
Today, Thursday, April 12, 2018, I bought VNOM, for both client and my personal accounts.
Here's why I bought this stock:
+ Technical: One week ago, on April 5, the stock broke out of a 10-week range to a new 3-year high. We are buying today at a price above the April 5 close, but below the April 5 intraday high.
+ Volume spike, mostly on the buy side: Yesterday's volume was more than 3x average, and set an 8-month high.
+ Triple-digit recent sales growth. Here are the quarterly year-to-year sales growth rates from the last four quarters, in chronological order: +137%, +115%, +113%, and, most recently, for the quarter ended Dec 31, +112% to $59.2 million.
+ Excellent recent earnings-per-share growth. Here are the quarterly EPS figures for the last eight quarters:
Mar 17 vs Mar 16: 22c vs 3c Jun 17 vs Jun 16: 23c vs 9c Sep 17 vs Sep 16: 24c vs 12c Dec 17 vs Dec 16: 37c vs 19c
+ Strong and rising earnings-per-share estimates: According to recent data from First Call, the consensus earnings estimate for 2018 is $1.39, revised upward from $1.30 90 days ago (and up from 2017 actual earnings of $1.07); and the consensus estimate for 2019 is $1.58, revised upward from $1.55 90 days ago.
+ Valuation: At 17 times next year's estimated earnings and a projected 5-year annualized earnings growth rate of 23%, the stock is, by my usual metric, attractively priced.
+ History of earnings surprises: This company has reported earnings-per-share at least a penny above estimates in each of the past five quarters. Most recently, for the quarter ended Dec 31, they "beat the Street" by 7c.
+ The company's industry group ("Oil & Gas - US Exploration & Production") is ranked #46 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, Thursday, April 12, 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, Thursday, April 12, 2018, I sold SPY, for both client and my personal accounts.
I sold just enough SPY to pay for VNOM. We remain fully invested.
-KD, Thursday, April 12, 2018
* Buy prices shown are net after commissions.
** Current prices are at least 20 minutes old.
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 firstname.lastname@example.org. 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.
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.
The Deen's List
Copyright © 2018 Deen Capital Management, Inc.