I was wondering if you could share more about how and when you shift from a stock that has not been moving much to one that has grown to be a more likely candidate for stock price growth. Do you move only 20% or 50% out of a stock for these moves?
I’ve been active over the last 5 months and have still not recovered from the multiple hits on the high growth stocks I own, but have finally got my portfolio to ones I am very happen to stay with thru the ups and downs. Now I am struggling with how much and when to move allocations when I see what I perceive as an opportunity. ie. Seems like moving out of SKX since it is stagnant and likely won’t have significant movement till next earnings in February and moving more funds into something like INFN or LGIH would be a great move right now. Then the question is how much to move. Measuring the level of conviction on MY belief that SKX will remain range bound for a month would lead me to want to temporarily move ALL out and into others that ARE moving.
I think ALOT of your success is on the timing of these transfers of funds among your portfolio and not just being in the right stocks.
That was a very good question you asked about how I adjusted my position in SKX. Sorry it took me some time to research it. As far as what I did in SKX, here it is
Skechers hit a high at about $53.50 some months ago. I sold a small amount (maybe 2% of my position) at $51.30 or so because I felt my position was getting too big. Then SKX reported “terrible news” for the Sept quarter (missed some analyst’s estimate) and the price dropped to $25 or so (?!). It’s now at $30.
Let me quickly give you a capsule of how SKX has been doing. People got all hung up about the price having tripled or so in a couple of years, and said that it was in a bubble. I’ll give you some figures and let you decide for yourself if they had been in a bubble and how bad their results were:
Their earnings went like this:
2012 — 06
2013 — 39
2014 — 100
And their earnings for the first nine months of 2015 are up 70%. In other words, they already have $1.38 for 2015 (which is 38 cents, or 38%, more than they had all last year, and they have another quarter to go). Their adjusted trailing earnings are $1.56. If you are paying attention, that means that they will probably have earnings of very conservatively, at least $1.65, up 65% for the year.
How about revenue? (In billions of dollars)
2012 — 1.56
2013 — 1.85
2014 — 2.38
From 2013 to 2014 they were up 29%. In the first 9 months of this year they were up 34%, and they already have more revenue than they had all last year. Backlog was up 28% from a year ago. Comparable sales were up 10.4% last quarter. Their adjusted PE is under 20.
I bought additional shares from $26 to $32 with an average price of about $29.75. The additional amount I bought was about 25% of my then current position (or about 20% of my now current position. I haven’t sold any down at these prices. It was my second biggest position and more than 15% of my portfolio, or I might have added a larger percentage of my existing position.
I hope this helps