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: +54.8% for the 60 months ending May 11, 2018 (vs. +83.9% for the S&P)
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Vol.16 #111 Monday, May 14, 2018 10:02AM EDT

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

Market Stance: BULLISH (since April 10, 2018)

Contents

Typical Client Performance
Bought The Trade Desk, Inc. (TTD)
Sold SPDR S&P 500 ETF (SPY) +3.5%
Typical Client Portfolio
Subscription Information
Privacy Policy
Disclaimers
Contact Us

Typical Client Performance

Deen Capital S&P 500
Year-to-date as of May 11, 2018 +0.9% * +2.7%
12 months (May 11, 2017 to May 11, 2018) +9.5% * +16.0%
24 months (May 11, 2016 to May 11, 2018) +46.0% * +37.3%
36 months (May 11, 2015 to May 11, 2018) +28.9% * +37.4%
48 months (May 11, 2014 to May 11, 2018) +40.3% * +56.9%
60 months (May 11, 2013 to May 11, 2018) +54.7% * +83.9%

* 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 The Trade Desk, Inc. (TTD)

Initial percent of portfolio (approx.)6.8%
Net buy price in managed accounts*$76.59
Most recent close (May 11)$75.61
Net change (based on net buy price)+0.98
Today's volume as of 10:02AM EDT1.3 million ($96.5 million)
Average daily volume742,500 ($56.9 million)
This year's earnings-per-share$1.69 (est)
Next year's earnings-per-share$2.19 (est)
P/E using next year's earnings35.0 (est)
Earnings growth rate, next 5 years24% per year (est)

* Buy prices shown are net after commissions and fees.

Today, Monday, May 14, 2018, I bought TTD, for both client and my personal accounts.

Here's why I bought this stock:

+ Huge earnings surprise: Last Thursday, May 10, after the close, the company announced results for the quarter ended March 31. Earnings came in at 34c per diluted share (vs 18c last year and analysts' consensus 10c). Revenue was up 61% to $85.7 million (analysts' consensus $73.2 million).

+ Breakout: The next day, Friday, the stock jumped +43% one extremely heavy volume, breaking out of a 7-month range to a new all-time high.

+ Volume spike, mostly on the buy side: Friday's volume was about 17 times average, the heaviest one-day trading volume this stock has ever seen.

+ Excellent and now accelerating recent sales growth. Here are the quarterly year-to-year sales growth rates from the last four quarters, in chronological order: +54%, +50%, +42%, and, most recently, as cited above, +61%.

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

Jun 17 vs Jun 16: 52c vs 21c
Sep 17 vs Sep 16: 35c vs 24c
Dec 17 vs Dec 16: 54c vs 33c
Mar 18 vs Mar 17: 34c vs 18c

Valuation: At 35 times next year's estimated earnings and a projected 5-year annualized earnings growth rate of 23.5%, the stock is, 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 7c above estimates in each of the past six quarters, including the just-reported quarter cited above, which "beat the Street" by 24c.

+ The company's industry group ("Commercial Services - Advertising") is ranked #47 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.

I chose to buy the stock in spite of the following negative factor:

- Strong but falling earnings-per-share estimates for next year: According to recent data from First Call, the consensus earnings estimate for 2018 is $1,69, revised upward from $1.67 90 days ago (but up from 2017 actual earnings of $1.60); and the consensus estimate for 2019 is $2.19, revised downward from $2.24 90 days ago.

-KD, Monday, May 14, 2018

Sold SPDR S&P 500 ETF (SPY) +3.5%

Net sell price in managed accounts*$273.45
Date(s) boughtApr 10 2018
Net buy price in managed accounts*$264.27
Holding period4.9 weeks
Gain/loss in managed accounts*+3.5% (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 14, 2018, I sold SPY, for both client and my personal accounts.

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

-KD, Monday, May 14, 2018

Typical Client Portfolio

Company Name Stock
Symbol
Buy
Date
NetBuy
Price*
Current
Price**
Weeks
Held
% of
Portfolio
Gain
(Loss)
The Trade Desk, Inc. TTD 05/14/18 $76.59 $75.61 0.0 6.9% -1.3%
Green Dot Corp. GDOT 05/11/18 $72.08 $72.00 0.4 6.0% -0.1%
Sunrun Inc. RUN 05/10/18 $11.54 $10.69 0.6 5.5% -7.4%
Diodes Inc. DIOD 05/10/18 $32.94 $32.56 0.6 5.0% -1.2%
Zebra Technologies Corp. ZBRA 05/09/18 $153.86 $155.57 0.7 5.1% +1.1%
Xcerra Corp. XCRA 05/09/18 $13.35 $13.59 0.7 4.9% +1.8%
Penn Virgina Corp. PVAC 05/09/18 $62.06 $63.08 0.7 5.0% +1.6%
Expeditors International EXPD 05/09/18 $70.12 $72.35 0.7 4.8% +3.2%
Stoneridge Inc. SRI 05/08/18 $27.89 $29.08 0.9 5.2% +4.3%
iShares Core S&P 500 IVV 05/08/18 $267.81 $274.47 0.9 4.9% +2.5%
Nanometrics Inc. NANO 05/07/18 $35.55 $36.78 1.0 5.1% +3.5%
Malibu Boats, Inc. MBUU 05/03/18 $40.74 $41.92 1.6 5.0% +2.9%
Centene Corp. CNC 05/03/18 $114.88 $114.44 1.6 4.8% -0.4%
Enova International, Inc. ENVA 05/01/18 $28.90 $32.55 1.9 5.5% +12.6%
DMC Global, Inc. BOOM 04/27/18 $39.54 $40.95 2.4 5.2% +3.6%
SPDR S&P 500 ETF SPY 04/25/18 $262.51 $272.85 2.7 11.8% +3.9%
SPDR S&P 500 ETF SPY 04/10/18 $264.27 $272.85 4.9 9.3% +3.2%
Cash 0.2%  
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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