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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, 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
* 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
* Buy prices shown are net after commissions.
** Current prices are at least 20 minutes old.
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