Re: TROX and other recent sales
I like to build a new position over time w/ several Buys (hopefully at lower prices). I made two Buys in TROX after you mentioned it but sold out of the position on it's recent run up past $14.57/share booking a 16% gain. My strategy is to accumulate shares at/below the SMA(200) weekly for TROX now at $14.50. Hopefully, I can build the position over 2 months as a bottom is put in place.
This is true for many of my core positions since my best gains have been made buying below the SMA(200) weekly. You get this opportunity 2 -3 times in a 5-6 year period and it's more amplified w/ commodity & cyclical companies vs GARP and/or growth stocks.
My strategy is to wait for the company to cross above the SMA(200) weekly and begin it's next cycle up move that may/could be (1) stock specific developments, (2) a growing economy and/or (3) reversion to the mean. Then, I like to slowly peel off my high cost shares w/ gains and hold on to my lower cost shares for the completion to the cycle and/or company recovery.
I still hold over 50% of my UNFI shares I accumulated in the $7-$9 area as the story was one of company turnaround and market expansion from the purchase of warehouse distribution assets from SuperValue in 10/2018. They continue to outperform, increasing revenues even 4 years after that acquisition. Their forward PE is still quite low and my fair value target for UNFI is at/near $60/share.
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I peeled off high cost shares in ALE; CTG & UBA as they finally have consolidated and started their move at/above their SMA(200) weekly. ALE not so much but getting close as it's SMA(200) weekly is at $67.76 (sold 8% at $65.11/share). However, BOTH UBA and CTG have crossed above their SMA(200) weekly each w/ their own special situation and continue to be undervalued based on their forward PE. I use the $SPX PE as a reference which is 19.18x vs UBA at 12x and CTG at 14x.
Nothing works 100% but w/ almost 100 positions this strategy works well and I can initiate 5-8 new company positions a year and expect that w/i 18 - 24 months I s/d see a recovery above the SMA(200) weekly and can begin to harvest my high cost shares for a gain.
In the case of UBA, I have most of my Buys in 2020 (April, May, Aug & Sept) w/ an avg cost of $9.46/share (in the taxable account). The company announced a 2 million share stock buy back October 2022 ( Urstadt Biddle Properties Inc. Announces 2,000,000 Share Repurchase Program) and perhaps that was the the catalyst for the price to move above it's SMA(200) weekly now at $18.04/share.
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The one big problem w/ this approach is you must have patients. So, I do deviate from this strategy from time to time (typically w/ growth tech names) and in many cases get the chance to buy lower as I was way too early buying shares. I now keep my Buys small in the high tech names (5-10 shares at a time) but then do begin to add in size if/when they break below their SMA(200) weekly. AMAT & ORCL are examples of this w/ core positions in each (buys in Sept & Oct). Not so much w/ GOOGL & QCOM (started buying too early).
Pail, I know you have been a buyer in UBA. Are you starting to sell shares at these levels?
I own a few shares in the ROTH I bought at $23.79/share and have those for sale at $23.87. In this account I have an avg cost if $11.79/share as I always like to add shares at/below the SMA(200) and that helped me w/ adds in late 2020. UBA traded around $23 as a high and $9 as a low in 2020 during the COVID pandemic. |
