Existing Risk Positions - Hibbett & Fastenal
As we indicated in recent communications, we are concerned that we are in the midst of a correction and we feel obligated to raise cash levels so that we can be ready to seize the opportunities that we believe will be present in the coming months. On that note, we exited Hibbett Sports and Fastenal today. [PostStockWidget stock_valuation="" pricetype="live" manual_date="Dec. 21, 2012, 2:04pm GMT" symbolcodes="'FAST','HIBB'" symbolprices="40,30" div_align="right"]
Fastenal (FAST) is a wholesale distributor of industrial and construction supplies in North America. Products include: threaded fasteners; tools, metal cutting tool blades and abrasives, fluid transfer components and accessories for hydraulic and pneumatic power, material handling, storage and packaging products, electrical supplies, welding supplies, safety supplies, metals and materials. Fastenal is based in Minnesota.
As part of our strategy to raise cash in the event of a market correction, we identified FAST as a company with a high multiple that is likely to come off in a market correction.
EXITING FASTENAL AT $39.16 (FAST-US) FULL POSITION
TOTAL RETURN: -3.4%
Hibbett Sports, Inc. (HIBB) is a sporting goods retailer in the United States that offers a range of athletic equipment, footwear and apparel. Its stores are Hibbett Sports, Sports Additions, Sports & Co. and Hibbett Team Sales, Inc. As of January 28, 2012, it operated 832 stores in 26 states.
Hibbett has been identified as a company that could be susceptible to a correction in the stock market. Our decision to exit was motivated by the drop in market capitalization below $1 billion (which by default increases the risk level) and is a requirement for a Purple Chip stock and secondly by the softening earnings outlook
EXITING HIBBETT SPORTS AT $30.18 (HIBB-US) HALF POSITION
TOTAL RETURN: -31.5%
