Raising Cash - Exiting JNJ, Citrix & IHS
Extraordinary times call for extraordinary actions. Based on experience of the last 32 years, the market action in the last few weeks is a signal that we are about to enter a correction phase in the stock market that could erase some of the gains that stocks have made in the last few years. If history is any judge, the correction will likely evolve about 3 times faster than the time it took to make gains in the last few years. In light of the above, we think it is prudent to have more cash in your portfolio and buy the best quality stocks when it seems that the correction has run its course. [PostStockWidget stock_valuation="" pricetype="live" manual_date="Dec. 21, 2012, 2:04pm GMT" symbolcodes="'JNJ','IHS','CTXS'" symbolprices="98,108,69" div_align="right"]
Johnson & Johnson (JNJ) is a global household products company. The Company is engaged in the research and development, manufacture and sale of a range of products in the health care field across three business segments: Consumer, Pharmaceutical and Medical Devices. Facilities are located in the United States, Belgium, Brazil, Canada, China, France, Germany, India, Israel, Japan, the Netherlands, Singapore, Switzerland and the United Kingdom.
We bought JNJ in August 2015 at $91.12. In light of our expectation that the market is entering a corrective phase, we prefer to take the profit and buy again on weakness. JNJ is a very widely held stock that has a high correlation with the trend of the stock market.
EXITING JOHNSON & JOHNSON AT $98.46 (JNJ-US) HALF POSITION
TOTAL RETURN: +8.9%
Citrix Systems (CTXS) provides businesses with access to apps, desktops, data and communications on any device, over any network or cloud. Its Mobility Apps applications include communications cloud, documents cloud and workflow cloud.
We are locking in the profit on Citrix at the current price. We had a higher target, but do not expect Citrix to be able to avoid going down in a market correction. We also believe that higher quality opportunities will present themselves in the next few months.
EXITING CITRIX INC. AT $69.64 (CTXS-US) HALF POSITION
TOTAL RETURN: +21.1%
IHS is a global provider of information and analysis, decision-support tools and related services, serving four information domains: energy, product lifecycle, security, and environment. It also provides macroeconomic data and analysis.
Although it is a good company, we believe that the slowdown in earnings growth could take the stock price lower in a market correction and that higher quality opportunities will be available in the next few months.
EXITING IHS INC. AT $110.64 (IHS-US) HALF POSITION
TOTAL RETURN: -3.7%
