Spring cleaning on my portfolio was due

When I decide to acquire shares in a company I am interested in I usually try to hold them for as long as possible because I am satisfied with the risk reward at the time of purchase. However sometimes the market gives you opportunities that changes the landscape of your investment thesis and you have to be ready to change or reshuffle your portfolio. That doesn’t mean you have to liquidate half of your portfolio and buy other companies, it means nothing it wrong with some spring cleaning :-).

So I decided to sell the following minor holdings in my portfolio to raise cash for some future targets.

positions sold :

CVS : I sold this position ( at a minor capital loss) because I was wrong about my investment thesis for this giant healthcare pharmacy name. I believed they would be able to keep growing their franchise & reward there shareholders with dividend raises and share buybacks, this has unfortunately been a 10 year treasury bill substitute for me and  I had to accept the inability of management to make meaningful decisions to spur capital gains.

WBA: Same logic for Walgreen boots alliance, a competitor that you find in many dividend ETF including VIG.

 

Both of those Pharmacy names have low profit margins and the mistake I have made is to believe that volume sales would compensate for it. No matter how big a company is it doesn’t automatically translate into strong economic moat

 

PFE: I sold Pfizer with a 40 % capital gain on the position & dividends I have received for the last 3 years now. I had to sale to raise cash for upcoming opportunities which I believe have better potential and stronger moat.

DIS: I sold my small stake I had in Disney, again not because I don’t like the brand name or management capacity to do fairly well but because I am targeting new opportunities that I believe will do better. I sold the position to a very small capital loss offset by the dividend I have received for the last few years.

 

What are my Targets now that I have raised cash ?

MMM: I have been looking forward to initiate a position in this company for some time now, I missed the last drop at around 180$/share but I am hoping to have the chance to initiate at around 185-190$ share. Sure there is going to be headwinds for this company because they do have a good portion of their sales outside the us but the product portfolio has always been in demand and I am confident I will do well in the long run.

MCO: Moody’s has been in my bucket list for a while now because companies need to have a credit rating it is just not optional. This is a growth stock and it has very little exposure to macro headwinds which is a + & it is in a duopoly position.

 

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

Blog at WordPress.com.

Up ↑

%d bloggers like this: