The Deen's ListTM
A service of Deen Capital Management, Inc. (www.deencapital.com)
Our goal: Outperform the S&P 500 in both up markets and down.
Our result: +55.8% for the 60 months ending May 4, 2018 (vs. +81.8% for the S&P)
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Vol.16 #97 Monday, May 7, 2018 10:10AM EDT

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

Market Stance: BULLISH (since April 10, 2018)

Contents

Typical Client Performance
Bought NV5 Global, Inc. (NVEE)
Sold SPDR S&P 500 ETF (SPY) +0.9%
Typical Client Portfolio
Subscription Information
Privacy Policy
Disclaimers
Contact Us

Typical Client Performance

Deen Capital S&P 500
Year-to-date as of May 4, 2018 -1.2% * +0.2%
12 months (May 4, 2017 to May 4, 2018) +11.0% * +13.5%
24 months (May 4, 2016 to May 4, 2018) +44.4% * +34.9%
36 months (May 4, 2015 to May 4, 2018) +25.2% * +33.6%
48 months (May 4, 2014 to May 4, 2018) +35.9% * +53.0%
60 months (May 4, 2013 to May 4, 2018) +56.8% * +81.8%

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

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Click here for information on managed accounts.

Bought NV5 Global, Inc. (NVEE)

Initial percent of portfolio (approx.)5.0%
Net buy price in managed accounts*$64.08
Most recent close (May 04)$65.40
Net change (based on net buy price)-1.32
Today's volume as of 10:32AM EDT54,007 ($3.5 million)
Average daily volume82,000 ($5.3 million)
This year's earnings-per-share$3.06 (est)
Next year's earnings-per-share$3.82 (est)
P/E using next year's earnings16.8 (est)
Earnings growth rate, next 5 years20% per year (est)

* Buy prices shown are net after commissions and fees.

Today, Monday, May 7, 2018, I bought NVEE, for both client and my personal accounts.

Here's why I bought this stock:

+ Earnings surprise: Last Thursday, May 3, after the close, the company announced results for the quarter ended March 31. Earnings came in at 59c per diluted share (vs 39c last year and analysts' consensus 52c). Revenue was up 48% to $94.5 million (analysts' consensus $89.3 million).

+ Market reaction: The stock jumped +6.8% on Friday on heavy volume.

+ The stock was down a bit this morning as I write this, and I am viewing this dip as a buying opportunity.

+ Excellent recent sales growth. Here are the quarterly year-to-year sales growth rates from the last four quarters, in chronological order: +50%, +52%, +49%, and, most recently, as cited above, +48%.

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

Jun 17 vs Jun 16: 56c vs 38c
Sep 17 vs Sep 16: 75c vs 41c
Dec 17 vs Dec 16: 71c vs 41c
Mar 18 vs Mar 17: 59c vs 39c

+ Strong and rising earnings-per-share estimates: According to recent data from First Call, the consensus earnings estimate for 2018 is $3.06, revised upward from $2.77 90 days ago (and up from 2017 actual earnings of $2.41); and the consensus estimate for 2019 is $3.82, revised upward from $3.30 90 days ago.

+ Valuation: At 16.8 times next year's estimated earnings and a projected 5-year annualized earnings growth rate of 20%, the stock is, by my usual metric, attractively priced.

+ History of earnings surprises: This company has reported earnings-per-share at least 3c above estimates in each of the past five quarters, including the just-reported quarter cited above, which "beat the Street" by 7c.

+ The company's industry group ("Commercial Services - Consulting") is ranked #29 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, May 7, 2018

Sold SPDR S&P 500 ETF (SPY) +0.9%

Net sell price in managed accounts*$266.71
Date(s) boughtApr 10 2018
Net buy price in managed accounts*$264.27
Holding period3.9 weeks
Gain/loss in managed accounts*+0.9% (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, Monday, May 7, 2018, I sold SPY, for both client and my personal accounts.

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

-KD, Monday, May 7, 2018

Typical Client Portfolio

Company Name Stock
Symbol
Buy
Date
NetBuy
Price*
Current
Price**
Weeks
Held
% of
Portfolio
Gain
(Loss)
NV5 Global, Inc. NVEE 05/07/18 $64.08 $63.05 0.0 4.9% -1.6%
Malibu Boats, Inc. MBUU 05/03/18 $40.74 $40.96 0.6 5.0% +0.5%
Centene Corp. CNC 05/03/18 $114.88 $116.60 0.6 5.0% +1.5%
Enova International, Inc. ENVA 05/01/18 $28.90 $30.75 0.9 5.3% +6.4%
Solaris Oilfield Infrastruct SOI 04/30/18 $19.11 $19.10 1.0 5.0% -0.0%
DMC Global, Inc. BOOM 04/27/18 $39.54 $39.00 1.4 5.0% -1.4%
SPDR S&P 500 ETF SPY 04/25/18 $262.51 $267.37 1.7 11.7% +1.9%
SPDR S&P 500 ETF SPY 04/10/18 $264.27 $267.37 3.9 58.1% +1.2%
Cash 0.1%  
Total 100%  

* Buy prices shown are net after commissions.

** Current prices are at least 20 minutes old.

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Disclaimers

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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