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: +54.2% for the 60 months ending May 8, 2018 (vs. +80.2% for the S&P)
For complete performance data, click here
Vol.16 #102 Wednesday, May 9, 2018 9:41AM EDT

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

Market Stance: BULLISH (since April 10, 2018)

Contents

Typical Client Performance
Bought Zebra Technologies Corp. (ZBRA)
Sold SPDR S&P 500 ETF (SPY) +1.2%
Typical Client Portfolio
Subscription Information
Privacy Policy
Disclaimers
Contact Us

Typical Client Performance

Deen Capital S&P 500
Year-to-date as of May 8, 2018 -0.8% * +0.5%
12 months (May 8, 2017 to May 8, 2018) +10.3% * +13.4%
24 months (May 8, 2016 to May 8, 2018) +44.0% * +34.9%
36 months (May 8, 2015 to May 8, 2018) +26.5% * +33.8%
48 months (May 8, 2014 to May 8, 2018) +38.6% * +53.9%
60 months (May 8, 2013 to May 8, 2018) +54.2% * +80.2%

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

Click here for more performance data.

Click here for information on managed accounts.

Bought Zebra Technologies Corp. (ZBRA)

Initial percent of portfolio (approx.)5.0%
Net buy price in managed accounts*$153.86
Most recent close (May 08)$153.24
Net change (based on net buy price)+0.62
Today's volume as of 9:55AM EDT77,332 ($11.9 million)
Average daily volume383,800 ($59.1 million)
This year's earnings-per-share$9.26 (est)
Next year's earnings-per-share$9.85 (est)
P/E using next year's earnings15.6 (est)
Earnings growth rate, next 5 years10% per year (est)

* Buy prices shown are net after commissions and fees.

Today, Wednesday, May 9, 2018, I bought ZBRA, for both client and my personal accounts.

This stock is a component of the S&P 500 Midcap Index.

Here's why I bought this stock:

+ Earnings surprise: Yesterday, May 8, before the open, the company announced results for the quarter ended March 31. Earnings came in at $2.56 per diluted share (vs $1.37 last year and analysts' consensus $2.05). Revenue was up 13% to $977.0 million (analysts' consensus $935.6 million).

+ Breakout: Also yesterday, the stock jumped +11% on very heavy volume.

+ Volume spike, mostly on the buy side: Yesterday's trading volume was more than 3 times average, and set a 12-month record.

+ Accelerating recent sales growth. Here are the quarterly year-to-year sales growth rates from the last four quarters, in chronological order: +2%, +3%, +9%, and, most recently, as cited above, +13%.

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

Jun 17 vs Jun 16: $1.51 vs $1.17
Sep 17 vs Sep 16: $1.87 vs $1.43
Dec 17 vs Dec 16: $2.33 vs $1.93
Mar 18 vs Mar 17: $2.56 vs $1.37

+ Strong and rising earnings-per-share estimates: According to recent data from First Call, the consensus earnings estimate for 2018 is $9.26, revised upward from $7.80 90 days ago (and up from 2017 actual earnings of $7.05); and the consensus estimate for 2019 is $9.85, revised upward from $8.36 90 days ago.

Valuation: At 15.6 times next year's estimated earnings and a projected 5-year annualized earnings growth rate of 10%, the stock, by my usual metric, may not be a bargain, but is at least priced within reason.

+ History of earnings surprises: This company has reported earnings-per-share at least 3c above estimates in each of the past six quarters, including the just-reported quarter cited above, which "beat the Street" by 51c.

+ The company's industry group ("Elec - Misc Products") is ranked #81 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, Wednesday, May 9, 2018

Sold SPDR S&P 500 ETF (SPY) +1.2%

Net sell price in managed accounts*$267.54
Date(s) boughtApr 10 2018
Net buy price in managed accounts*$264.27
Holding period4.1 weeks
Gain/loss in managed accounts*+1.2% (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, Wednesday, May 9, 2018, I sold SPY, for both client and my personal accounts.

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

-KD, Wednesday, May 9, 2018

Typical Client Portfolio

Company Name Stock
Symbol
Buy
Date
NetBuy
Price*
Current
Price**
Weeks
Held
% of
Portfolio
Gain
(Loss)
Zebra Technologies Corp. ZBRA 05/09/18 $153.86 $152.05 0.0 5.0% -1.2%
Stoneridge Inc. SRI 05/08/18 $27.89 $28.21 0.1 5.1% +1.2%
iShares Core S&P 500 IVV 05/08/18 $267.81 $269.42 0.1 4.8% +0.6%
NV5 Global, Inc. NVEE 05/07/18 $64.08 $60.60 0.3 4.7% -5.4%
Nanometrics Inc. NANO 05/07/18 $35.55 $35.95 0.3 5.1% +1.1%
Malibu Boats, Inc. MBUU 05/03/18 $40.74 $41.16 0.9 5.0% +1.0%
Centene Corp. CNC 05/03/18 $114.88 $113.33 0.9 4.9% -1.3%
Enova International, Inc. ENVA 05/01/18 $28.90 $31.40 1.1 5.4% +8.6%
DMC Global, Inc. BOOM 04/27/18 $39.54 $39.45 1.7 5.1% -0.2%
SPDR S&P 500 ETF SPY 04/25/18 $262.51 $267.56 2.0 11.7% +1.9%
SPDR S&P 500 ETF SPY 04/10/18 $264.27 $267.56 4.1 43.2% +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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