Re: DELL - Time to establish you strategy, time frame & exit (unless you plan to hold forever).
So what's your strategy? Is this going to be a 1%, 5% , 25% or 50% portfolio position ? Do you now scale into that w/ small buys on dips and/or just small buys over next 45 days? Do you plan to set a stop?
These are all things I consider (except using stops) when I am building a core position.
For me, my buy points do not work for this stock as I try to find stocks selling at/below their SMA(200) weekly, many others I know look at SMA(20) but DELL is at an All Time HIGH.
I try to build my core portfolio (new position) w/ 3-5 Buys over days/weeks and decide if it is going to be a 1% portfolio position or more/less based on my price target expectations.
Typically the stocks I look at are out of favor, selling at some discount w/ a problem that needs to be fixed, and/or the market has yet to see the value and/or opportunity that I see.
PYPL +2.69% is one I have been accumulating. It is selling 142% Below it's SMA(200) & close to breaking above it's SMA(200) daily at $64/share. I started this position 1/2023 and now have 27 small buys through out 2023. 25% of my shares are underwater but my avg cost is 3% lower than today's closing price. My highest cost shares are 15% higher, while my lowest cost shares are 20% lower.
I am bullish on PYPL w/ their new CEO & management team and believe $130-$140 is a good 18 month target price based on PE expansion and earnings growth. MA & V avg PE is 33x
PYPL s/d earn $4.38/share end of 2024 so even a 25x PE, price s/d hit $105/share.
(Note: tables below from Morningstar for PYPL)
As discussed up thread previous management has not done a very good job as evidenced by poor ROA & ROIC numbers. My thesis is the new CEO & management team will improve that (+50% or more?). It will take at least 18 months but Mr. Market may reward the shareholders in 12 months.
Strategy is to peel off those high cost shares in 3 months (if not sooner), then sit & wait for management to streamline their platform, create new payment partnerships and even move into Bitcoin transaction processing.
I have set my parameters, last 19 Buys are all in the Green and no stop losses unless some catastrophic 'company specific' event might occur, then I would close the position.
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In your case, you may want to establish a stop loss level and then just raise that stop loss level 2% for every 5% move up for the stock.
FWIW, I try to find 6-8 New Positions a year w/ expectations to sell in 18 months and/or hold forever. Typically I start at a 1% portfolio position. Also, I will add/sell (peel off) from other positions as they develop over then next 18 months . . . |
