Sell du Pont (DD)
I’m selling E.I. du Pont (DD) out of the Jubak Dividend Income Portfolio today, May 28, for the same reason that I just sold Rayonier (RYN). The stock has held up so well that the 4.5% yield doesn’t compare favorably to the higher yields offered by stocks that have been beaten up in the recent correction.
I’m selling du Pont today to make room for one of the higher yielding stocks that I picked in today’s post “The selloff has created big bargains in dividend stocks” http://jubakpicks.com/2010/05/28/4084/ . The stock’s price is up 37.5% since I added it the dividend income portfolio on December 9, 2008.
And, of course, the stock has paid that solid, Treasury-note-beating dividend for all that time too.
Full disclosure: I own shares of Rayonier in my personal portfolio and will sell them three days after this is posted.
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Sold in late April with RYN, PCH. Did well for half year of ownership.
good to flow you see what you did and better I m do work with you but I not to clever help me may be make you busy more but i know you still help me from 5 year ogo ready thank Jubak I learn alot then my english get bette now i can typer not to much ,any way your thing better than my you do i will flow
DD is still paying me 6.9% based on my purchase price. It is also $13+/share above my purchase price. I don’t see much risk of losing money and nearly 7% for parking money is OK. I’ll keep DD and put a stop on for 50% gain on my original cost.
Jim, the best advice I picked up from you was back in the MSN time, during the darkest days of 2008. You described “get paid to wait” I went for it. The result is a whole bunch of stuff like DD. Thanks!
duwach,
I’m in the same boat with DD. I’m going to continue to hold, because the fundamental reasons behind my decision to buy remain true today. Additionally, DD will be introducing several new products in the near future that look to be solid winners. The stock still has significant upside potential, and I’m willing to be paid to wait.
Jim mentions that he’s selling DD because the stock price “has held up so well”. I believe the stock price strength is because investors see DD as a low risk play. Indeed, Jim is rotating more risk into his portfolio for more yield. I think that’s a great decision for Jubak’s Dividend Portfolio. However, many readers of this blog seem to be more risk averse than Jim in the current environment, and have expressed disagreement with Jim’s new picks at this time. For those individuals, I would suggest that DD is still a good stock worth considering.
My target price for this stock is $42. That represents a 16% upside along with a 4.5% dividend for a buyer at today’s price. Perhaps less yield and less upside than other stocks, but solid potential with less risk.
“Get paid to wait” is just one of many reasons I thank Jim and read his blog every day!
I bought DD in Dec 08 and doubled down on 3/12/09 hoping to “get paid while you wait”.I have done very well in the interim. I am nervous, like everyone else, and am going to stick with solid stocks.
I haven’t posted b/4 but very much appreciate Jim’s thoughful analysis of his buy and sell recommendations. I also find the comments , pro and con, very helpful. T
Duwach–You don’t seem to be considering opportunity cost. The point of investing is getting the most going forward, not what has already happened. I hope this comment is constructive for you, and gives a new angle to consider.