Hello Friends! Thanks so much for stopping by and visiting my blog, Stock Picks Bob's Advice. As always, please remember that I am an amateur investor, so please remember to consult with your professional investment advisors prior to making any investment decisions based on information on this website.
As I like to do, I wanted to update you with an actual trade I just made in my trading account. A few moments ago I sold my remaining 180 shares of St Jude Medical (STJ) at $36.23. These shares had been purchased 10/15/03 at a cost basis of $28.90/share so I had a gain of $7.33 or 25.4%.
So why did I sell my shares? STJ got my attention today when examining my list of stocks I noted that the stock was selling at $36.30 (currently) down $(5.00) or (12.11)%. Looking through the news I found this story on first-quarter outlook where the company noted that the upcoming quarter was going to be light on both profit and revenue and cut projections. This is a case of lowered guidance, which had the exact opposite effect of all of those reports by companies I like to refer to which include raised guidance! Thus, the stock dipped.
My own instinct was to stay the course so to speak. I do not see anything in this news that says the company is not a great investment, etc., etc., but another fact came to light. I realized, that since I had purchased this stock in October, 2003, I had made two sales of partial positions on gains involving thirty shares sold 1/28/04, and another 60 shares sold on 7/20/05. With my second sale at a 60% appreciation level, my strategy calls for me to unload my remaining shares if the stock should retrace 50% of my highest sale point, which would be back to a 30% gain. Thus, with today's drop, the stock also hit a sale point for me on the downside and I pulled the plug!
Anyhow, that's what happened. Again with my portfolio management system, this sale doesn't really change anything. I don't get to buy another position to replace STJ because this sale was on "bad news". However, I have a couple of stocks that appear ripe for a sale on the upside, so I shall be waiting for that event before adding a new stock to the mix.
Would I ever revisit STJ? Absolutely. It just has to be at the right place at the right time and I shall be rebuying shares. But with so many other stocks to choose from, it is unlikely that I shall be owning shares of this company in the near future.
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