My exit strategy for LSI :
Over a period of 4 or 5 years, I have seen that LSI has extremely erratic earnings, and therefore, does not qualify as a long-term investment. So, I am planning to sell it off completely, and then gradually invest the proceeds in stocks (not necessarily tech stocks) that have a more predictable earnings picture as well as high (and stable) return on equity. Stocks like GCI, JNJ, IPG, IFF, MO and BEN come immediately to mind. Of course, I am prepared to wait until they come down to reasonable levels.
Anyway, as far as LSI is concerned, the current sales per share is $9.25 Assuming these numbers, here is my exit strategy :
@ 4 times sales, i.e. @ $37, 1/4 of my LSI will be sold
@ 4.5 times sales, i.e. @ $42, the next 1/4 will go
@ 5 times sales, i.e. @ $47, the next 1/4 will go
@ 5.5 times sales, i.e. @ $52, everything goes!
How does it look?
Dipy. |
