The Deen's ListTM
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Our goal: Outperform the S&P 500 in both up markets and down.
Our result: +67.1% for the 60 months ending April 16, 2018 (vs. +87.4% for the S&P)
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Vol.16 #81 Tuesday, April 17, 2018 10:39AM EDT

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Market Stance: BULLISH (since April 10, 2018)


Typical Client Performance
Bought Movado Group Inc. (MOV)
Sold SPDR S&P 500 ETF (SPY) +1.9%
Typical Client Portfolio
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Typical Client Performance

Deen Capital S&P 500
Year-to-date as of April 16, 2018 -0.1% * +0.7%
12 months (Apr 16, 2017 to Apr 16, 2018) +13.6% * +17.1%
24 months (Apr 16, 2016 to Apr 16, 2018) +41.2% * +33.7%
36 months (Apr 16, 2015 to Apr 16, 2018) +22.9% * +34.9%
48 months (Apr 16, 2014 to Apr 16, 2018) +38.0% * +55.4%
60 months (Apr 16, 2013 to Apr 16, 2018) +68.5% * +87.4%

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

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Bought Movado Group Inc. (MOV)

Initial percent of portfolio (approx.)5.0%
Net buy price in managed accounts*$39.68
Most recent close (Apr 16)$39.95
Net change (based on net buy price)-0.27
Today's volume as of 10:39AM EDT51,290 ($2.0 million)
Average daily volume158,800 ($6.3 million)
This year's earnings-per-share$2.23 (est)
Next year's earnings-per-share$2.41 (est)
P/E using next year's earnings16.5 (est)
Earnings growth rate, next 5 years15% per year (est)

* Buy prices shown are net after commissions and fees.

Today, Tuesday, April 17, 2018, I bought MOV, for both client and my personal accounts.

Today, Tuesday, April 17, 2018, I bought MOV, for both client and my personal accounts.

Here's why I bought this stock:

+ Earnings surprise: On March 29, before the open, the company announced results for the quarter ended Jan 31. Earnings came in at 52c per diluted share (vs 22c last year and analysts' consensus 26c). Revenue was up 14% to $149.2 million (analysts' consensus $132.5 million).

+ A "true surprise"*: Prior to the news, the stock was trading in a tight range. Then, on March 29, after the news, it soared +16% 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: The price movement on March 29 represents a breakout from a 42-month range.

+ Volume spike, mostly on the buy side: March 29 volume was some 13 times average, and was a 12-month record.

+ The stock has been mostly edging higher since then. Even so, our buy price today is more than 2 points below the March 29 intraday high.

+ Turnaround in recent sales growth. Here are the quarterly year-to-year sales growth rates from the last four quarters, in chronological order: -13%, +1%, +6%, and, most recently, as cited above, +14%.

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

Apr 17 vs Apr 16: $0.01 vs $0.19
Jul 17 vs Jul 16: $0.43 vs $0.27
Oct 17 vs Oct 16: $1.04 vs $0.91
Jan 18 vs Jan 17: $0.62 vs $0.22

+ Strong and rising earnings-per-share estimates: According to recent data from First Call, the consensus earnings estimate for FY 19 (ends Jan 31) is $2.23, revised upward from $1.94 90 days ago (and up from FY 18 actual earnings of $2.00); and the consensus estimate for FY 20 is $2.41, revised upward from $2.15 90 days ago.

+ Valuation: At 16.5 times next year's estimated earnings and a projected 5-year annualized earnings growth rate of 15%, the stock is, by my usual metric, reasonably priced.

+ History of earnings surprises: This company has reported earnings-per-share at least 19c above estimates in each of the past three quarters, including the just-reported quarter cited above, which "beat the Street" by 26c.

+ 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:

- The company's industry group ("Retail/Wholesale - Jewelry") is ranked #147 for relative strength out of 197 industry groups tracked by Investor's Business Daily. This ranking changes daily, and it has been generally falling over recent weeks and months.

-KD, Tuesday, April 17, 2018

Sold SPDR S&P 500 ETF (SPY) +1.9%

Net sell price in managed accounts*$269.39
Date(s) boughtApr 10 2018
Net buy price in managed accounts*$264.27
Holding period1.0 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, Tuesday, April 17, 2018, I sold SPY, for both client and my personal accounts.

I sold just enough SPY to pay for MOV. We remain fully invested.

-KD, Tuesday, April 17, 2018

Typical Client Portfolio

Company Name Stock
% of
Movado Group Inc. MOV 04/17/18 $39.68 $39.80 0.0 5.0% +0.3%
Viper Energy Partners LP VNOM 04/12/18 $27.02 $29.18 0.7 5.3% +8.0%
NV5 Global, Inc. NVEE 04/11/18 $58.95 $62.75 0.9 6.3% +6.5%
SPDR S&P 500 ETF SPY 04/10/18 $264.27 $269.38 1.0 77.2% +1.9%
Stoneridge Inc. SRI 04/06/18 $28.97 $29.20 1.6 6.1% +0.8%
Cash 0.1%  
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.

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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