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Author: IlanBigfoot Three stars, 500 posts Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 2364  
Subject: Re: MFI Month 14(.5 ?) Date: 9/14/2012 6:26 PM
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Well, a quick check on magicformulainvesting.com shows neither company is on the loosest lists anymore. Oshkosh is now a $2.73B company and looking at the top 50 companies with a minimum cap of $2700m shows its absence. Same for Teradyne, market cap $3.08B. The list for 50 companies with minimum cap of $3000m doesn't have Teradyne.

So there's at least 50 better companies to buy for each of these at the same market cap.

But if you still want to hold on to them, you can follow some of the classic selling advice choices:

1. Sell a third at three different price points or time periods.
2. Sell your initial stake and let the profits run.
3. Some brokers (Etrade, for one) let you put GTC trailing stop-loss orders. So you could sell whenever it falls, say, 8% from the local high, otherwise letting the stocks run up.

From Etrade: Select Trailing Stop % to buy or sell a security when its market price reaches a trailing stop price. The trailing stop price is initially specified in terms of percentage (Stop Value %) above (for buy orders) or below (for sell orders) a security’s market price. The trailing stop price is automatically adjusted as the market fluctuates. When the security’s market price reaches the stop price, the order is triggered and turns into a Market order.

4. If you've selected prices points above which you'd sell, you could sell calls. Here's a chart showing some calls at different months with their annualized return if the stock price is unchanged, or if it is called (i.e. goes above the strike price.) Of course, the stock can go down below the break-even price and you lose money... Note these % do not include trading fees or taxes, etc.


Symbol Expires Strike Stock Bid Ask Break-Even Unchanged Called
OSK Jan 13 $31.00 $29.76 $2.00 $2.10 $27.71 19% 32%
OSK Apr 13 $34.00 $29.76 $1.80 $1.95 $27.89 10% 34%
TER Jan 13 $17.50 $16.43 $0.80 $0.90 $15.58 14% 33%
TER Apr 13 $18.00 $16.43 $1.15 $1.25 $15.23 12% 28%


5. Use technicals to calculate when the stocks will hit "resistance". I don't know much about this personally.

6. Use fundamentals to calculate when they will be fairly priced. I like to play with predicted earnings and traditional P/E ratios to find a happy mid-point. For example, pulling up the S&P report on TER shows over the past ten years it has always hit a low below $13. Five of the ten years, it lost money. Personally, I'd get out of TER quickly.
OSK pre-2008 crash hit annual high P/Es around 20. Perhaps with an est. earnings of ~$2.50, perhaps it will hit a high of $50? I wouldn't stick around if it got that high.

This post is probably longer than you wanted, but whatever you end up doing, I suggest planning it ahead of time. Good luck and tell us how is goes!
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