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Market Stance: BULLISH (since April 10, 2018)
* An average of managed accounts, net after all commissions and fees.
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* Buy prices shown are net after commissions and fees.
Today, Monday, April 30, 2018, I bought SOI, for both client and my personal accounts.
Here's why I bought this stock:
+ Technical: The stock was up on very heavy volume Friday, and this morning it is breaking out of a 2-month range. The long-term trend is up, but the price fell sharply in January and early February, and is only now starting to recover.
+ Explosive recent sales growth. Here are the quarterly year-to-year sales growth rates from the last four quarters, in chronological order: +229%, +349%, +289%, and, most recently, for the quarter ended Dec 31, +246% to $25.2 million.
+ Two quarters of excellent earnings-per-share growth. Here are the quarterly EPS figures for the last eight quarters:
Mar 17 vs Mar 16: 1c vs 1c Jun 17 vs Jun 16: 1c vs 1c Sep 17 vs Sep 16: 13c vs 1c Dec 17 vs Dec 16: 20c vs 5c
+ Strong and rising earnings-per-share estimates: According to recent data from First Call, the consensus earnings estimate for 2018 is $1.76, revised upward from $1.67 90 days ago (and up from 2017 actual earnings of 35c); and the consensus estimate for 2019 is $2.73, revised upward from $2.20 90 days ago.
+ Valuation: At 7 times next year's estimated earnings and a projected 5-year annualized earnings growth rate of 48%, the stock is, by my usual metric, very attractively priced.
+ History of earnings surprises: This company has reported earnings-per-share at least 2c above estimates in each of the past two quarters. Most recently, for the quarter ended Dec 31, they "beat the Street" by 10c.
+ The company's industry group ("Chemicals - Specialty") 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.
-KD, Monday, April 30, 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, Monday, April 30, 2018, I sold IVV, for both client and my personal accounts.
I sold just enough IVV to pay for SOI. We remain fully invested.
-KD, Monday, April 30, 2018
* Buy prices shown are net after commissions.
** Current prices are at least 20 minutes old.
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