When to Sell a Stock

Written by Donnie Nguyen

February 24, 2019

The S&P 500 is well out of correction territory for its sixth week in a row. It’s now just 5.0% off of its all-time high set in September of last year.  

As you know from my previous blog posts, I spent 5% of my portfolio cash to buy stocks at the 10% drop level and another 5% at the 20% drop level. My goal now is to sell some of my stocks and get my portfolio cash levels back to about 25%.  

After taking a hard look at my portfolio, I decided to part with all of my shares of Dentsply Sirona (XRAY). I first bought XRAY in 2016. I knew about this company over 20 years ago when I worked in a medical and dental supply store on my college campus. We supplied all of the dental students with kits comprised mostly of Dentsply products. My thesis on the stock was that its a worldwide leader in dental products, the middle-class is rising around the world which should grow demand for dental care, and one of its main competitors – Align Technology (ALGN) just lost several key Invisalign patents in 2017.

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However, Mr. Market didn’t agree with my thesis. My stock was down 15% when I decided to sell all of my shares. I lost faith in the company. After Dentsply merged with Sirona, several former Sirona executives left. I’ve been waiting patiently to see if the merger would add value. At this point, I think there needs to be a major catalyst for the company to rebound. So XRAY goes back on my watchlist and I may purchase it again in the future if I think a major catalyst is about to happen.

Other big news for the week – Warren Buffett published his annual letter to shareholders. It’s a must-read for long-term investors.

How are you guys handling the market? Share your thoughts by commenting below. 

Disclosure

I/we have no positions in any stocks mentioned and no plans to initiate any positions within the next 72 hours.

I wrote this article myself and it expresses my own opinions. I’m not receiving compensation for it (other than from Wolves Of Investing), and I have no business relationship with any company whose stock is mentioned in this article.

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