The Deen's ListTM
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Our goal: Outperform the S&P 500 in both up markets and down.
Our result: +57.3% for the 60 months ending April 30, 2018 (vs. +82.7% for the S&P)
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Vol.16 #94 Tuesday, May 1, 2018 12:18PM EDT

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

Market Stance: BULLISH (since April 10, 2018)


Typical Client Performance
Bought Enova International, Inc. (ENVA)
Bought iShares Core S&P 500 (IVV)
Sold Movado Group Inc. (MOV) -3.6%
Typical Client Portfolio
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Typical Client Performance

Deen Capital S&P 500
Year-to-date as of April 30, 2018 -1.6% * -0.4%
12 months (Apr 30, 2017 to Apr 30, 2018) +8.7% * +13.1%
24 months (Apr 30, 2016 to Apr 30, 2018) +39.8% * +33.2%
36 months (Apr 30, 2015 to Apr 30, 2018) +24.5% * +34.7%
48 months (Apr 30, 2014 to Apr 30, 2018) +33.1% * +51.9%
60 months (Apr 30, 2013 to Apr 30, 2018) +56.0% * +82.7%

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

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Bought Enova International, Inc. (ENVA)

Initial percent of portfolio (approx.)4.9%
Net buy price in managed accounts*$28.90
Most recent close (Apr 30)$29.30
Net change (based on net buy price)-0.40
Today's volume as of 1:11PM EDT287,453 ($8.3 million)
Average daily volume275,100 ($8.0 million)
This year's earnings-per-share$2.02 (est)
Next year's earnings-per-share$2.44 (est)
P/E using next year's earnings11.8 (est)
Earnings growth rate, next 5 yearsn/a

* Buy prices shown are net after commissions and fees.

Today, Tuesday, May 1, 2018, I bought ENVA, for both client and my personal accounts.

Here's why I bought this stock:

+ Earnings surprise: Last Thursday, April 26, after the close, the company announced results for the quarter ended March 31. Earnings came in at $1.02 per diluted share (vs 45c last year and analysts' consensus 68c). Revenue was up 32% to $254.3 million (analysts' consensus $231.5 million).

+ A "true surprise"*: For more than two months prior to the news, the stock had been trading in a tight range. Then, Friday, the day after the new, it jumped 27% 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 Friday represents a breakout from a three-and-a-half-year range to a new all-time high.

+ Volume spike, mostly on the buy side: Friday's volume was about 6 times average, and set a 12-month record.

+ Since Friday, the stock has continued to act well, with little profit-taking.

+ Excellent and accelerating recent sales growth. Here are the quarterly year-to-year sales growth rates from the last four quarters, in chronological order: +10%, +11%, +20%, and, most recently, as cited above, +32%.

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

Jun 17 vs Jun 16: $0.41 vs $0.28
Sep 17 vs Sep 16: $0.25 vs $0.28
Dec 17 vs Dec 16: $0.26 vs $0.25
Mar 18 vs Mar 17: $1.02 vs $0.45

+ Valuation: At 12 times next year's estimated earnings, the stock may still be, even after the recent price jump, attractively priced.

+ History of earnings surprises: This company has reported earnings-per-share at least 5c above estimates in each of the past five quarters, including the just-reported quarter cited above, which "beat the Street" by 34c.

+ 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 factors:

- Strong but falling earnings-per-share estimates for next year: According to recent data from First Call, the consensus earnings estimate for 2018 is $2.02, revised upward from $1.86 90 days ago (and up from 2017 actual earnings of 15c); and the consensus estimate for 2019 is $2.44, revised downward from $2.63 90 days ago.

- The company's industry group ("Internet - Content") is ranked #32 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, May 1, 2018

Bought iShares Core S&P 500 (IVV)

Initial percent of portfolio (approx.)5.7%
Net buy price in managed accounts*$264.77
Most recent close (Apr 30)$266.31
Net change (based on net buy price)-1.54
Today's volume as of 1:11PM EDT1.9 million ($497.0 million)
Average daily volume4.7 million ($1.3 billion)

* Buy prices shown are net after commissions and fees.

Today, Tuesday, May 1, 2018, I bought IVV, for both client and my personal accounts.

After buying ENVA, I moved all remaining cash into this proxy for the S&P 500.

Note that we sold IVV yesterday, and bought it back today at a lower price. This helps our relative performance.

-KD, Tuesday, May 1, 2018

Sold Movado Group Inc. (MOV) -3.6%

Net sell price in managed accounts*$38.23
Date(s) boughtApr 17 2018
Net buy price in managed accounts*$39.68
Holding period2.0 weeks
Gain/loss in managed accounts*-3.6% (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, May 1, 2018, I sold MOV, for both client and my personal accounts.

I still like this stock, but I see reason for concern short-term based on purely technical considerations -- a minor double-top chart pattern.

-KD, Tuesday, May 1, 2018

Typical Client Portfolio

Company Name Stock
% of
iShares Core S&P 500 IVV 05/01/18 $264.77 $264.56 0.0 5.6% -0.1%
Enova International, Inc. ENVA 05/01/18 $28.90 $29.10 0.0 5.1% +0.7%
Solaris Oilfield Infrastruct SOI 04/30/18 $19.11 $18.13 0.1 4.8% -5.1%
DMC Global, Inc. BOOM 04/27/18 $39.54 $38.35 0.6 5.0% -3.0%
SPDR S&P 500 ETF SPY 04/25/18 $262.51 $262.78 0.9 11.7% +0.1%
SPDR S&P 500 ETF SPY 04/10/18 $264.27 $262.78 3.0 67.7% -0.6%
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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