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Is it time to sell?
Old 11-19-2014, 12:27 PM   #1
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Is it time to sell?

I bought Target on 8/7/14 and it's gone up 25% since then. At that time, I think their revenue forecast was down and having some trouble with Canadian operation. I figured it's a good dividend play so it'll probably go back up. If not, I'll just hold onto it for dividends. It's got a solid history of dividends so can't really go wrong. My sell target originally was when it goes up about 17%, which is 52 week high.

As you can tell, I don't know much about this stock. Extent of my research is reading Value Line report. Should I sell this? If I sell, don't know what to do with cash… it'll probably just sit in cash b/c I don't see any other good dividend stocks that are undervalued and market index seems pretty high.
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Old 11-19-2014, 01:46 PM   #2
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Target is not doing well in Canada. Might have to pack up and go home.

Target making progress in Canada, but results still ‘unacceptable’ - The Globe and Mail
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Old 11-19-2014, 02:32 PM   #3
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Originally Posted by Enjoy the Ride View Post
As you can tell, I don't know much about this stock.
Why did you buy it?
How did you set a selling price?
Why did you ignore your selling price and hold it?
Should you really be investing in individual stocks?
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Old 11-19-2014, 02:57 PM   #4
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If you sell now you'll end up paying more in short-term taxes unless it's in a retirement account. But if you're not comfortable holding individual stocks you possibly shouldn't be in them.
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Old 11-19-2014, 03:35 PM   #5
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I bought it thinking it's undervalued. Selling price at 52 week high b/c I figured it's a good dividend stock so it's bound to hit that high eventually. Until then, collect dividends. Ignored selling point b/c it kept going up and I was busy with other stuff so didn't really look at it. No fundamental analysis to back it up. All in retirement account so no short term tax impact.

Individual stocks account for less than 5% of my holding. I have other stocks with similar strategy and they're doing far better than market return... for now.
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Old 11-19-2014, 04:14 PM   #6
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I started watching the stock after their data breach. Thought it would bounce off that bottom. It has, unfortunately I didn't play. If I had it would be time to take my profits.
That said,I didn't investigate the company for a long term investment.
Best wishes.

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Old 11-21-2014, 06:32 AM   #7
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At current prices and for short term (<2 years) time horizon I would sell.

With a medium term horizon (2 - 5 years) I'd stay unless it went up another 30% or so. But only after checking management and market position.

For a longer term horizon I would never have bought it, and sell immediately.

You'll probably ask why:
  • Target seems to be in trouble and net income took a hit. It will rebounce and struggle. However the market already priced that in (P/E of 30!)
  • In the longer term a decent retailer gets 3% - 4% net margin, Target used to get that too. And grow revenues with inflation + population. Current market cap would justify a run-up of an additional 30% to reflect that. Good chance that a chain of that size can regroup itself.
  • Retail is capital intensive and has a lowish rate return on capital. In addition not much growth potential. Not so decent in the long run, especially because the downside (lose market share) is always looming.
All in all, I would sell and go look for a better place to invest - not cash though.
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Old 11-21-2014, 10:19 AM   #8
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Take the money and run. The holiday season might be kind to Target and there could be a rise in share value, but the market may just as well punish shareholders in January. Quit while you're ahead.

-Jon
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Old 11-21-2014, 11:18 AM   #9
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k, thanks for the input. I'll sell and maybe buy market index now or market time a bit.

Can I get general consensus on these two stocks as well? I bought these around the same thing for same reasons as Target.

Coke: Up 12% and it's past my sell target.
Walgreens: Up 11% and I bought it around the time they didn't want to do tax inversion so got a massive hit... they might've had decrease earnings forecast too. As you can tell I don't really do research. This hasn't hit my sell point yet. Maybe another 10% until it hits 52 week high.
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Old 11-21-2014, 11:35 AM   #10
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k, thanks for the input. I'll sell and maybe buy market index now or market time a bit.

Can I get general consensus on these two stocks as well? I bought these around the same thing for same reasons as Target.

Coke: Up 12% and it's past my sell target.
Walgreens: Up 11% and I bought it around the time they didn't want to do tax inversion so got a massive hit... they might've had decrease earnings forecast too. As you can tell I don't really do research. This hasn't hit my sell point yet. Maybe another 10% until it hits 52 week high.
Regarding Coke, hard to imagine they would sell, but at the same time, look at Anheiser-Busch!

Will Coca-Cola Get Bought Out? - Stocks to Watch - Barrons.com

Regarding Walgreens,

http://www.chicagobusiness.com/reale...taps-brokerage

I worked for a CPG company for 15+ years and I can tell you that Walgreens was unique and challenging. The fact that they are cost cutting and outsourcing services like real estate management tells me that they quite a but of margin pressure.

I would not buy either, but would probably hold on Coke and sell Walgreens.
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Old 11-21-2014, 11:37 AM   #11
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WAG: its P/E ratio is 33.65 right now. I wouldn't buy at this valuation. I might hold for the dividend if my time horizon is long enough. If you're sweating, sell.

KO: If you're disciplined enough to set a sell target, you should be disciplined enough to sell at this point.

This is less about predicting future stock valuations; more about discipline and risk mitigation.

-Jon
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Old 11-21-2014, 11:47 AM   #12
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I bought GMCR earlier this year, its had a very nice run, but I sold today, same principle, get out at the right target.

I bring them up because of the initial question on KO

I would keep an eye on both GMCR and KO in the spring, their collaboration on a cold beverage delivery system is going to be significant in my opinion. I believe if they get the tech right and at the right price point, that coke, gatorade, vitamin water equivalents using in home tap water could be interesting.

System is due out in the spring. Hoping to buy the dip again next year.
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Old 11-21-2014, 11:54 AM   #13
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Wait and get end of year dividends

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Old 11-21-2014, 03:17 PM   #14
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I just sold 6 call options on CAT at $115 for Feb 2015.
I have done this because I had too many CATs , and want to simplify my accounts.
So I set the price target in my mind and then used the option method. If it doesn't go, I've still made $900 and will try again.
I'm not really in a hurry and the current price is below the 52 wk high.
With the way the market is going, I don't really see it running up 20% in the next 3 months, so I'm gambling only a small amount.
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Old 11-21-2014, 06:59 PM   #15
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Originally Posted by Enjoy the Ride View Post
I bought Target on 8/7/14...I don't know much about this stock. Extent of my research is reading Value Line report. Should I sell this? .

Yes. You don't know much about the stock. Sell, use the money to go to Vegas. Have fun.


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Old 12-10-2014, 11:41 AM   #16
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I don't have a dog in the fight, but enjoy being a spectator. Noticed what is probably just a coincidence.
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Old 12-10-2014, 05:29 PM   #17
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I just sold 6 call options on CAT at $115 for Feb 2015.
I have done this because I had too many CATs , and want to simplify my accounts.
So I set the price target in my mind and then used the option method. If it doesn't go, I've still made $900 and will try again.
I'm not really in a hurry and the current price is below the 52 wk high.
With the way the market is going, I don't really see it running up 20% in the next 3 months, so I'm gambling only a small amount.
Well things change so quick. I had thought CAT would go up.
Now that CAT is at $93.02 , I can see I would have been better off predicting the future and just selling and buying it back.
Other than coal mining coming to a stop due to cheap oil prices, is there any other reason for them to fall so far ?
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Old 12-11-2014, 12:39 PM   #18
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My impression is that CAT had lots of sales in China. Not any more. The dollar is too strong.

One might think that the Chinese would buy Japanese, but you would be wrong about that.
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