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: +55.6% for the 60 months ending May 15, 2018 (vs. +80.0% for the S&P)
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Vol.16 #112 Wednesday, May 16, 2018 2:30PM EDT

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

Market Stance: BULLISH (since April 10, 2018)

Contents

Typical Client Performance
Bought Insight Enterprises, Inc. (NSIT)
Sold SPDR S&P 500 ETF (SPY) +3.1%
Typical Client Portfolio
Subscription Information
Privacy Policy
Disclaimers
Contact Us

Typical Client Performance

Deen Capital S&P 500
Year-to-date as of May 15, 2018 +1.8% * +2.1%
12 months (May 15, 2017 to May 15, 2018) +8.6% * +14.9%
24 months (May 15, 2016 to May 15, 2018) +47.3% * +37.6%
36 months (May 15, 2015 to May 15, 2018) +28.4% * +35.4%
48 months (May 15, 2014 to May 15, 2018) +43.2% * +56.5%
60 months (May 15, 2013 to May 15, 2018) +55.5% * +80.0%

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

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Click here for information on managed accounts.

Bought Insight Enterprises, Inc. (NSIT)

Initial percent of portfolio (approx.)5.0%
Net buy price in managed accounts*$45.60
Most recent close (May 15)$44.64
Net change (based on net buy price)+0.96
Today's volume as of 2:48PM EDT334,126 ($15.2 million)
Average daily volume265,700 ($12.1 million)
This year's earnings-per-share$3.96 (est)
Next year's earnings-per-share$4.27 (est)
P/E using next year's earnings10.7 (est)
Earnings growth rate, next 5 years7% per year (est)

* Buy prices shown are net after commissions and fees.

Today, Wednesday, May 16, 2018, I bought NSIT, for both client and my personal accounts. Here's why I bought this stock:

+ Huge recent earnings surprise: Two weeks ago, May 2, after the close, the company announced results for the quarter ended March 31. Earnings came in at 94c per diluted share (vs 56c last year and analysts' consensus 60c). Revenue was up 19% to $1.76 billion (analysts' consensus $1.53 billion).

+ A "true surprise"*: For more than two months prior to the news, the stock was trading in a tight range. Then, on May 3, after the news, it jumped +12% on huge 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).

+ Two breakouts: That price jump on May 3 was a breakout from a 5-month range. The price continued to climb, and, one week ago, on May 9, it broke out of a 7-month range to a new 12-month high.

Since May 9, the price has come down a bit, below the breakout point. One the one hand, you could say that the second breakout has failed. However, I am viewing this minor dip as a buying opportunity.

+ Volume spike, mostly on the buy side: The trading volume on May 3 was more than 7 times average, and set a 12-month record.

+ Excellent recent sales growth. Here are the quarterly year-to-year sales growth rates from the last four quarters, in chronological order: +16%, +26%, +22%, and, most recently, as cited above, +19%.

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

Jun 17 vs Jun 16: $1.14 vs $0.97
Sep 17 vs Sep 16: $0.73 vs $0.63
Dec 17 vs Dec 16: $0.81 vs $0.72
Mar 18 vs Mar 17: $0.94 vs $0.56

+ Strong and rising earnings-per-share estimates: According to recent data from First Call, the consensus earnings estimate for 2018 is $3.96, revised upward from $1.44 90 days ago (and up from 2017 actual earnings of $3.24); and the consensus estimate for 2019 is $4.27, revised upward from $3.51 90 days ago.

Valuation: At 10.7 times next year's estimated earnings and a projected 5-year annualized earnings growth rate of 7.4%, the stock is, by my usual metric, is reasonably priced.

+ History of earnings surprises: This company has reported earnings-per-share at least 4c above estimates in each of the past eight quarters, including the just-reported quarter cited above, which "beat the Street" by 34c.

+ The company's industry group ("Wholesale - Electronics") is ranked #114 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 16, 2018

Sold SPDR S&P 500 ETF (SPY) +3.1%

Net sell price in managed accounts*$272.47
Date(s) boughtApr 10 2018
Net buy price in managed accounts*$264.27
Holding period5.1 weeks
Gain/loss in managed accounts*+3.1% (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 16, 2018, I sold SPY, for both client and my personal accounts.

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

-KD, Wednesday, May 16, 2018

Typical Client Portfolio

Company Name Stock
Symbol
Buy
Date
NetBuy
Price*
Current
Price**
Weeks
Held
% of
Portfolio
Gain
(Loss)
Insight Enterprises, Inc. NSIT 05/16/18 $45.60 $45.60 0.0 4.9% 0.0%
The Trade Desk, Inc. TTD 05/14/18 $76.59 $80.22 0.3 7.2% +4.7%
Green Dot Corp. GDOT 05/11/18 $72.08 $72.69 0.7 6.0% +0.8%
Sunrun Inc. RUN 05/10/18 $11.54 $10.85 0.9 5.5% -6.0%
Diodes Inc. DIOD 05/10/18 $32.94 $33.08 0.9 5.0% +0.4%
Zebra Technologies Corp. ZBRA 05/09/18 $153.86 $154.45 1.0 5.0% +0.4%
Xcerra Corp. XCRA 05/09/18 $13.35 $13.55 1.0 4.9% +1.5%
Penn Virgina Corp. PVAC 05/09/18 $62.06 $61.14 1.0 4.8% -1.5%
Expeditors International EXPD 05/09/18 $70.12 $72.03 1.0 4.7% +2.7%
Stoneridge Inc. SRI 05/08/18 $27.89 $30.78 1.1 5.4% +10.4%
iShares Core S&P 500 IVV 05/08/18 $267.81 $272.81 1.1 4.8% +1.9%
Nanometrics Inc. NANO 05/07/18 $35.55 $37.83 1.3 5.2% +6.4%
Malibu Boats, Inc. MBUU 05/03/18 $40.74 $42.57 1.9 5.1% +4.5%
Centene Corp. CNC 05/03/18 $114.88 $113.10 1.9 4.7% -1.6%
Enova International, Inc. ENVA 05/01/18 $28.90 $34.00 2.1 5.7% +17.6%
DMC Global, Inc. BOOM 04/27/18 $39.54 $41.50 2.7 5.2% +5.0%
SPDR S&P 500 ETF SPY 04/25/18 $262.51 $271.10 3.0 11.6% +3.3%
SPDR S&P 500 ETF SPY 04/10/18 $264.27 $271.10 5.1 4.3% +2.6%
Cash 0.1%  
Total 100%  

* Buy prices shown are net after commissions.

** Current prices are at least 20 minutes old.

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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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