I normally do not sell the securities that I’ve purchased in my Portfolios as I’m into it for a very long haul and buy them only after careful consideration, unless, there are some exceptional circumstances as below:
- A significant drop or total elimination of dividends
- A display of inappropriateness by the company, be it management, or otherwise
- An apparent fraud or even outright cooking of accounting books
I’d recently purchased Seagate Technology (STX) in Feb of this year and during that time, things looked to be going in right direction. Although, I was not fully convinced about it but thought that such a marquee company will be able to right the ship with the changes. However, in the technology world, even a year or even few months, can be a light year away. I still think STX has good story going for it, but, looking at the accelerating secular trends of drastic price reduction with each newer version of disks, storage and not to speak of cloud storage, I think it is too much risk to hold STX as a long-term duration security.
As a result of this learning experience, I’d add an additional point in above list: Watch for the secular trends in the area where the company operates. Technology is one field where predicting even for a year is a difficult proposition, probably best left to astrologers or talking heads on TVs.
I sold all my 40 positions of STX on 5/04 at $19.81. Now that, I’ve some ammo to fire for few buys 🙂 That’s what I exactly did: I bought below companies.
1) Bank of Nova Scotia (BNS)
I’d recently bought BNS and this was 5th addition to that. I added 10 positions in BNS on 5/09 at $47.62. It’ll add $20.20 of passive dividend income on an annual basis. BNS got the honor of my first buy of 2016. Bank stocks have nicely recovered and started to appear a bit on the expensive side in my opinion.
2) Eaton Corp, plc (ETN)
Eaton Corp plc is a power management company providing energy-efficient solutions for electrical, hydraulic and mechanical power. The company operates across 4 segments: electrical systems and services, hydraulics, aerospace and vehicle. The company was founded in 1916 and is headquartered in Dublin, Ireland. ETN has a current market cap of $24B.
ETN has dividend yield of 3.75% and trading at $60.87, dropping from 52 week high of $73.82, about 20% drop. I initiated 5 positions in ETN on 5/09 at $61.11 in my taxable account. It will add $11.40 of passive income annually that I do not need to work for.
3) Welltower, Inc. (HCN)
Real Estate Investment Trusts (REITs) have been pulled down due to concerns about Fed raising interest rates and their impact on the earnings of these REITs, though they started rallying in recently months. The yield of 4.79% is simply juicy.
I bought 5 positions in HCN on 5/13 at $71.74. It’ll add $17.20 of passive income on an annual basis.
Full Disclosure: Long on above mentioned securities.
Thanks for reading.
What do you think about these buy and especially sale?