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Friday, 16 January 2009
Johnson Controls (JCI) "Trading Transparency"

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 consult with your professional investment advisers prior to making any investment decisions based on information on this website.

A few moments ago I sold my 82 shares of Johnson Controls at $15.60/share.  I purchased these shares at $14.83/share on 11/20/08, so I had a gain of $.77/share or 5.2% since the purchase. 

This wasn't a sale based on any pre-determined appreciation or loss point.  This was simply my own decision that the fundamentals of the stock had changed such that I no longer felt it was an acceptable stock for my own trading portfolio.  As I write, JCI is trading at $15.69, down $(1.38) or (8.08)% on the day on the back of the 1st quarter 2009 earnings report released earlier today.

JCI announced that it had lost $608 million in the first quarter working out to $(1.02)/share.  A year ago, the company reported a profit of $235 million or $.39/share.  Johnson controls had pre-announced that it expected a loss, but the level of the loss exceeded the street's expectations.  Thomson Reuters analysts had expected a profit of $.01/share removing charges.  Even excluding those charges, JCI came in at a loss of $(.14)/share.

In addition, the company reduced expectations for the second quarter with guidance now to a second-quarter loss similar to the first quarter.  This is below the profit of $.18/share expected by analysts. 

The decline in sales for this company has involved far more than just the automotive sector, with automotive sales dropping 25%, Power Solutions business (vehicle batteries) declining 32%, and building efficiency sales off 4.8%. 

I still like Johnson Controls (JCI) for the long haul, but for the time being, I shall be stepping aside from this Wisconsin-based corporation.

This sale brings me back to my minimum of five holdings.  I shall look to add a new position if any of my remaining five should so indicate.  I shall also replace any sales of those five with a new but smaller-sized purchase should any of them reach a sale point.

Yours in investing,

 

Bob


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