The markets have had a fine run from the beginning of 2012. All the doom and gloom merchants seemed to have vanished and now nearly every expert on TV is bullish the market is going higher. This is a good point for investors to take some profits from shares that have been out of favor the past year, yet have gone up nicely.
Intel (INTC) has traded from a low of around 17.50 to today’s price of 26.60. It issued a revenue warning a few weeks ago and since then has beaten lowered expectations. It is always best to secure some profits when a stock has gone up 45% in 12 months so I suggest anyone with a decent profit should sell at least half their holdings and lock in profits. If it goes up from here then there are still profits to be made on half the holdings. If it goes down, then start to cost average down after a fall of 15% - 20%.
Microsoft (MSFT) is in a similar position, trading from a yearly low of 22.50 to today’s price of 29.70. It also issued a warning before earnings that PC sales were slowing. It beat its earnings estimates and has rallied nicely from its lows. Why be greedy as there is no such thing as a bad profit, such as with Intel. I suggest taking profit by selling half the holdings and keep the other half.
Both companies have great new products coming to market in 2012 and pay decent dividends, however with the world economies still in a state of flux many uncertainties still persist and discretion is usually the better part of valor.
Disclosure: I am long Intel and have no position in Microsoft.
No comments :
Post a Comment