I was interviewed by Eric Schleien for his Intelligent Investing Podcast.
We talked about Frost (CFR), BWX Technologies (BWXT), and Howden Joinery along with a lot of other stocks.
I also mention a new website I’m working on.
So, to hear me blabber on about stocks for a little over an hour – click here.
Listen to Geoff’s interview on the Intelligent Investing Podcast
Talk to Geoff about his interview…
Read moreI’ve gotten a lot of questions regarding my sales of Weight Watchers (WTW) and George Risk (RSKIA).
Interestingly, literally no one emailed me about selling Babcock & Wilcox Enterprises (BW).
I’ve picked out two questions as representatives of the larger group.
Question #1: George Risk
“Really interested in why you decided to suddenly sell RSKIA.
I mean it’s still obviously undervalued. You could have sold it in the beginning of 2014 for a better price than $8.40. Stocks in general were obviously cheaper at that time than they are now.
So logically it means you’ve found a better opportunity now than you could find in 2014 relative to the current price of RSKIA. That just seems really surprising to me.
The only logical conclusions are that you either lost patience with RSKIA, now have a different view on the risk of the markets, or really did find something better than what you could in 2013/2014.
If it’s the latter, I can’t wait to hear what it is when you decide to post it…”
I sold George Risk, because I am planning to buy Howden Joinery.
I don’t like to take positions that are smaller than 20% of my portfolio. The total amount I had available in cash, Natoco, and Weight Watchers combined was less than 20% of my portfolio. So, I sold George Risk to make room for Howden Joinery.
I try to only sell one stock to make room for another. The reason I hadn’t sold George Risk before is that I hadn’t found a stock I liked better than George Risk. I’ve now decided I like Howden Joinery better than George Risk.
Yes, I could have and should have realized this a couple years ago. I’ve known about Howden for years. Howden shares were cheaper in the past than they are now. George Risk shares were more expensive in the past than they are now. I’d have been better off if I made the swap sooner. But, it took me a while to come to this decision. I don’t own Howden yet. But, I expect to buy it soon.
Question #2: Weight Watchers
“With regards to your long term stake in WTW, I am just curious about the WTW sale, since WTW has announced growing subscription numbers and has Oprah as a Board Member, so things look rosier than last year.”
Yes. Weight Watchers is doing better now than it was in the past. Oprah Winfrey is a great spokeswoman and a good board member for WTW.
I didn’t sell my shares in Weight Watchers because I like the stock less now than I did last year. I sold my shares of Weight Watchers because I looked at what percent of my portfolio the stock made up and then considered whether or not I’d like to buy more.
Here’s what I said in a previous post:
“Weight Watchers, B&W Enterprises, …
Read moreLast week, I eliminated my entire position in George Risk (RSKIA).
This position was about 20% of my portfolio. It is now 0%.
My average sale price was $8.40 a share.
My average purchase price had been $4.66 a share (back in 2010).
I held the stock for about 6.5 years. So, the stock price compounded at about 9.5% a year while I held it.
George Risk also paid a dividend. The yield was rarely less than 4% a year. So, my total return in the stock was about 13% a year over my entire holding period.
My return in George Risk was not better than the return I could have gotten by simply holding the S&P 500 for the same 6.5 years.
However, the stock was cheaper than the S&P 500 when I bought it. I believe it remains cheaper than the S&P 500 today.
Right now, George Risk’s dividend yield is about 4.2%. And the stock has $6.36 a share in cash and investments versus a share price of $8.40 a share.
I didn’t sell George Risk because I no longer like the stock. Rather, I sold George Risk to make room in my portfolio for a totally new position.
I try to only buy one new stock a year. So, when I do finally buy this new position – it’ll be a big moment for me.
I’ll let you know once I’ve added the new position.…
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