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: +60.5% for the 60 months ending April 11, 2018 (vs. +82.7% for the S&P)
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Vol.16 #79 Thursday, April 12, 2018 10:15AM EDT

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Market Stance: BULLISH (since April 10, 2018)


Typical Client Performance
Bought Viper Energy Partners LP (VNOM)
Sold SPDR S&P 500 ETF (SPY) +0.8%
Typical Client Portfolio
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Typical Client Performance

Deen Capital S&P 500
Year-to-date as of April 11, 2018 -2.1% * -0.7%
12 months (Apr 11, 2017 to Apr 11, 2018) +11.1% * +14.3%
24 months (Apr 11, 2016 to Apr 11, 2018) +44.3% * +34.5%
36 months (Apr 11, 2015 to Apr 11, 2018) +22.3% * +33.3%
48 months (Apr 11, 2014 to Apr 11, 2018) +35.6% * +57.2%
60 months (Apr 11, 2013 to Apr 11, 2018) +62.2% * +82.7%

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

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Bought Viper Energy Partners LP (VNOM)

Initial percent of portfolio (approx.)5.0%
Net buy price in managed accounts*$27.02
Most recent close (Apr 11)$26.48
Net change (based on net buy price)+0.54
Today's volume as of 10:27AM EDT214,120 ($5.8 million)
Average daily volume429,400 ($11.6 million)
This year's earnings-per-share$1.39 (est)
Next year's earnings-per-share$1.58 (est)
P/E using next year's earnings17.1 (est)
Earnings growth rate, next 5 years23% per year (est)

* 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

Sold SPDR S&P 500 ETF (SPY) +0.8%

Net sell price in managed accounts*$266.30
Date(s) boughtApr 10 2018
Net buy price in managed accounts*$264.27
Holding period0.3 weeks
Gain/loss in managed accounts*+0.8% (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, 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

Typical Client Portfolio

Company Name Stock
% of
Viper Energy Partners LP VNOM 04/12/18 $27.02 $27.00 0.0 5.0% -0.1%
NV5 Global, Inc. NVEE 04/11/18 $58.95 $60.50 0.1 6.2% +2.6%
SPDR S&P 500 ETF SPY 04/10/18 $264.27 $266.38 0.3 82.7% +0.8%
Stoneridge Inc. SRI 04/06/18 $28.97 $28.83 0.9 6.1% -0.5%
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.

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