It is now time to recommend that Weyco Group (WEYS) be sold at the market. The stock has performed moderately since the investment observation was issued on July 6, 2009. Based on the Research Recommendation that was given, the price we quoted was within 7% of the lowest closing price for the last 4 years. Although Weyco Group (WEYS) seemed to have traded in a range in the last year, the stock has continuously climbed higher since our recommendation.
Although the price of WEYS has drifted higher, the pursuit of "seeking fair profits" requires that we consider alternative opportunities. The key to investment success and a key principle of economics is to seek the best alternatives.
WEYS was recommended when it was trading at $22.26. As of April 22, 2010, WEYS was quoted at $24.89. Based on the closing price of $24.89, WEYS has gained a total return (price appreciation plus 3 dividend payments) of 14.02%. The annualized return on this position would be 17.58%. Selling this stock now generates a return of 5.21x greater than the amount of the dividend yield if held for a full year. Additionally, the 14.02% gain exceeds the return on a 30-year treasury purchased on July 6, 2009 by 3.22x.
Those not interested in following through with our sell recommendation can feel comfortable knowing that WEYS is a great long-term holding with a 14.02% downside cushion since our investment observation. An additional insight on WEYS is the fact that the stock is approaching a technical breakout on the upside. The prospects are that the stock could revisit $27, $32 and $35.
As we have indicated in the purposes and function of this site, our goal is to:
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maximize the annual yield of each trade.
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reduce time between buying and selling of each stock.
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exceed the annual yield of government guaranteed alternatives in each trade.
Investment observations are intended to be a starting point for investigating a quality company at a reasonable price. It is hoped that after doing the background research you can buy the stock at a lower price. Ideally the stock should be held in a tax-deferred account and should not consist of less than 20% of your holdings. Personally, we prefer holding only 2-3 stocks at a time.
Sell recommendations are intended to deal with the short-term reality of the market. The tracking of the Sell recommendations are the worst case scenario if you happen to have bought a stock at the time the Investment Observation was made (please avoid making this mistake.) We aim for mediocrity in our returns, therefore we are happy with 9-12% annual gains.
It is always recommended that when selling a stock, one should not place stop orders, limit orders or orders after hours. This leaves the seller in the position of being vulnerable to the whims of the market makers. Instead, place your sell orders only as a market order during market hours. Some would complain that a market order during market hours might leave some profits on the table. However, we would rather leave some money on the table rather than have it taken away from us by the trades that are placed by institutions and market makers.
-Touc
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