Raising Cash; Exiting Winners Cisco, Empire & Stryker
With the increased volatility and pressures of earnings season, we are locking in profits from some significant winners, Cisco, Empire Group and Stryker.
Cisco Systems is the world's largest supplier of high-performance computer internetworking systems. Geographically, FY 11 (Jul.) sales were from the U.S. and Canada (54%), Europe (20%), emerging markets (11%), and Asia-Pacific (15%). Product families are categorized into four segments: switches (39% of total FY 11 product sales), routers (21%), new products (38%), and other (3%). The company also has a broad range of service offerings, including technical support and advanced services.
On July 10, 2012, we signaled a low valuation in Cisco at $16.50. In light of current market conditions, we believe it is wise to take profits and wait for other opportunities to appear
Total return over the time period including accumulated dividends reach 29.3%
RAISING CASH, EXIT CSCO ABOVE $USD 20.50 (CSCO-US, $USD 20.70)
Stryker Corporation is a medical technology company. The company operates in three segments: Reconstructive, MedSurg, and Neurotechnology and Spine. The Reconstructive segment offers orthopaedic reconstructive (hip and knee) and trauma implant systems, as well as other related products. The MedSurg segment provides surgical equipment and surgical navigation systems and other medical device products. The Neurotechnology and Spine segment includes neurovascular products, spinal implant systems, and other related products. Stryker Corporation was founded in 1941 and is headquartered in Kalamazoo, Michigan.
We signaled a low valuation in SYK on July 26, 2012 because of its smooth and predictable earnings history. At the time, we had a Purple Chips target of $67.00 within 18 months. Since then, the earnings continued to increase and the high valuation target was raised to $70.00. We have re-evaluated the high valuation and believe that the stock has reached a satisfactory valuation and we would be wise to realize our gain and raise cash levels.
Total return over the time period including accumulated dividends reached 27.6%
RAISING CASH, EXIT SYK ABOVE $USD 64.50 (SYK-US, $USD 64.70)
Empire Company owns or franchises approximately 1,500 retail stores under various banners, including Sobeys, IGA extra, Thrifty Foods, IGA, Foodland, and FreshCo, as well as Lawtons Drug Stores. The company also owns a portfolio of commercial real estate in Ontario, western Canada, and the United States. In addition, the company has interests in oil and gas properties in Alberta; and operates as a movie exhibitor at 50 locations
We signaled a low valuation in Empire on November 16, 2012 under $56.00. We are currently close enough to the high valuation target to realize the profit. Recall that we also signaled a low valuation in August 2009 and then sold at $52 in March 2010.
RAISING CASH, EXIT EMP.B AT $CDN 66.00 (EMP.B, $CDN 65.95)
