Rich and Ron recommend you sell your Hillenbrand shares as we look for places to deploy the capital. Are you selling along with us?
71% (156 Votes)
Yes, my whole position.
3% (8 Votes)
Yes, but I'm not selling my entire position.
11% (26 Votes)
No, I'm keeping my shares.
12% (27 Votes)
No, I never bought.
I am keeping my shares until I see the next buy recommendation. The dividend yield is better than if I just had the cash waiting to reinvest (if I wait until the June dividend payment that is).
I'm going to start calling MDP sell recs 'lemming alerts'. As soon as the alert hit my mailbox the chart fell off a cliff. So much for selling using a limit order.
So much for selling using a limit order.Yes, anytime there's a sell rec in any of the Fool services (reminding members to use limit orders), it always feels like a rush for the exits in a crowded movie theater.I do plan to sell all my shares and add to the cash I've reserved to deploy for greater upside. But there's no rush, folks.
I didn't receive an email alert to sell HI !!!! Just happened to see a "sell poll" post!- Craig
On May 6, one week ago, you said, '...we believe Hillenbrand's upside from current prices is modest compared to most of our other positions. The stock is a buy...' Today, you say dump it.This is why MDP guidance is becoming increasingly frustrating. Performance over the last several years during which I have been a member is nowhere near the hyped come-ons that finally persuaded me to subscribe in late 2010. Currently, 15 (including HI) of the 25 stocks in this portfolio are trailing the S&P since I purchased them. Add that to eight more that have been sold at less than the S&P gain at the time of sale vs. seven ahead of the S&P (three of which were partial sales to capture gains), and I wind up with 23 'losers' and only 14 'gainers.' Overall, I trail the S&P by almost 6%. Not an impressive record for a portfolio with the objectives this one has. In the future I will depend on other Fool services to meet my needs; already SA, for one, has done far better than MDP.Good luck as you move forward, and may your success rate improve significantly.EAC(selling HI in the near future)
I take the limit advice. Another few hours or days shouldn't make much of a difference.
As I have cash on the sidelines I will not be selling.
I'd say that the trade alert for Hillenbrand (HI) must have gone out at 14:00! At 13:28, I received an email from the Fool asking me to share my thoughts on Berkshire. But I did not receive the email alert for HI.Fool - Please tell me how this could happen.Thanks - Craig
EAC said "On May 6, one week ago, you said, '...we believe Hillenbrand's upside from current prices is modest compared to most of our other positions. The stock is a buy...' Today, you say dump it." IMO this is one of the major problems with doing away with the "Hold" status. There is no smooth transition from "Buy" to "Sell" leaving members with confusing guidance. So any member buying HI after the last earnings review would be asked to sell now. I think this is poor guidance transition and the hold status needs to be brought back. When stocks went on hold before, I would decide whether to hold or sell but I never bought more. If after the last earnings, the MDP team had some concerns, they could've moved it to "Hold" alerting members that a rating tradition may come.DW
Craig, I'm going to ask you for some particulars off the board. Stand by.Did anyone else not receive their email?Tomyour MDP editor
alerting members that a rating transition may come.Not "tradition."DW
Hi DW,You said: "If after the last earnings, the MDP team had some concerns, they could've moved it to "Hold" alerting members that a rating tradition may come."Please read the trade alert. There are no "concerns". This is a portfolio management decision. Since HI is within shouting distance of our Sell Around guidance, we see better uses for the capital.As the trade alert stated: "Since we believe Hillenbrand's fair value lies somewhere in the low-to-mid $30s, we think we have already captured most of our potential profit from this investment. That's why we're selling our Hillenbrand stake and looking to redeploy the profits in a more promising opportunity. Stay tuned to see what we buy next."Best,Ron
"On May 6, one week ago, you said, '...we believe Hillenbrand's upside from current prices is modest compared to most of our other positions. The stock is a buy...' Today, you say dump it."Given the recent elimination of the "Hold" designation, MDP can not be faulted for moving from a "Buy" to a "Sell" within a very short time frame. That said, I did not agree with the alteration from three classifications to two. There will always be varying degrees of perceived upside, and confidence, among a portfolio's holdings. If, because those who did not yet own a particular company could not possibly "Hold" it, and semantics is considered critical by the team, perhaps a name alteration ("Buy Last"?) might have been a better solution.
Hi broadmoor,Here's how our latest update on Hillenbrand concluded:"please note that we believe Hillenbrand's upside from current prices is modest compared to most of our other positions. The stock is a buy, but not the most attractive candidate for new money at the moment."When coupled with a "Sell Around" price of $33.25, I think that gives members a clear picture of our perceived upside.Foolishly,Rich
I didn't either.Dan
"'please note that we believe Hillenbrand's upside from current prices is modest compared to most of our other positions. The stock is a buy, but not the most attractive candidate for new money at the moment.'When coupled with a "Sell Around" price of $33.25, I think that gives members a clear picture of our perceived upside."Yes, it does, and having seen that $33.25 figure, I was, indeed, considering HI as a potential candidate for selling. Yes, too, as concerns this matter, the slight extra research required of a two-tiered rating system, over one of three, is not anywhere near burdensome. What it does, though, is remove some order, and simplicity, from our calculations and decision making.
I did not receive an email telling me to sell.
Dawesome and clairchen, thanks -- I've passed your names along to our tech team and we'll see what's going wrong. -- Tom
No email for me, either. Not a huge deal - looks like all I missed was a bunch of people who don't know how to use limit orders... Really, is it that important to SELL RIGHT NOW??? Come on folks, show some self control. (Yes, I know the folks who don't use limit orders probably aren't reading this, but I feel a bit better.)
Broadmoor"....Yes, too, as concerns this matter, the slight extra research required of a two-tiered rating system, over one of three, is not anywhere near burdensome. What it does, though, is remove some order, and simplicity, from our calculations and decision making..."I was indifferent to the rating change as I ultimately make my own Sell decisions. I anticipate at some point I will sell HI though. But I pay much more attention to Buy and Add decisions from MDP rather than Sell. That said, I have sentiments similar to Broadmoor as he says the two tier system removes order and simplicity. "Sell around" to me is a pretty nebulous and subjective attribute unless you make your own research effort and conclude how much you agree with it. And I don't believe a few dollars variance in that "sell around" price is the magical differentiator between a "sell" and "hold". I strongly believe that the real differentiators are going to actually turn out to be assumptions of the advisors and other qualitative factors, thus the status of a "hold" is in itself as much a qualitative call as a it is a function of a "sell around" price. Ultimately a "sell" decision too is always going to be as much a qualitative call as anything else. But in any case, as Broadmoor says, without that qualitative judgment of "hold" no longer being there, simplicity is really gone since an MDP member can't really assume or infer much, if any, qualitative reasoning of the advisors based on extent of variance from the "sell around" price.While clearly not the case with the blind rush to sell without limit orders, we MDP members should ideally take time after each "sell" decision to ensure we understand individually what choice we make for ourselves. However I do think a subset of members are paying fees to have such decisions made for them in which case none of this would matter anyway and leads to the lemming scenario suggested in a prior post.
I never received this either. First time it has happened to me.
I was just informed by our tech team that we've updated our email settings and all of you should receive your next MDP email with no trouble. Please let me know if that's not the case!Tomyour MDP editor
Am selling but at a higher limit order.
Tom,I was another who did not receive an email alert to sell HI----first time for non-receipt, and I've been an MDP member from day one. Regard,harbor991
I'm selling, though it was a "touch and go" decision.Here's how my "internal" debate progressed:1. The MDP team had been rather subdued in it's enthusiasm the last time it wrote it up. I wasn't surprised when the sell alert was sounded.2. I tend to think of the stocks I hold as either excellent, very good, or average. 3. My reasoning process gets complicated at this point. I will not sell either the very good or the excellent ones. I will mark the average ones for eventual "extermination," unless they pay a dividend above 3.5%. Then I will look at further considerations.Note: HI's dividend is around 2.6% (annualized). That, however, is the dividend yield based on the current market price. There's another calculation that needs to be done, at least for me. I bought shares at a lower price, and based on my cost basis for the stock, the actual yield of the money I put into the company is now 3.6%. That's above my cutoff point -- but just barely. I'd rather see 4% or more on my original investment. 4. HI is in my Roth IRA. I'd like more cash in that account so I can do more with put options without adding to my tax load. So that's a consideration.5. So how do I feel about this investment? HI has been well run, and it's decisions have been solid for the most part However, it's not a core stock, so I've been holding it loosely along with MDP for quite a while now. 6. In case we're about to face a major market sell off, I've been slowly increasing my cash percentage. I've been looking more closely at those stocks I could sell. If it hadn't been for the dividend, I might or might not have sold it already. Adding it all up, it's time for me to sell. I trust my "internal debate" could be a help to some of those following the boards. Hobe
Hobe--Thanks for drawing out your internal process. It's very cogent, and a great example of the individuality of investing decisions. (Parenthetically, it makes a lot of sense to evaluate dividend returns based on original investment, among other things.) Seems to me that the 'touch and go' is because HI falls between 'very good' and 'average.' Essentially, it's above average. Counting dividends, it's returned about 64% to my portfolio in 3+ years (2 separate purchases), about 8% ahead of the S&P, even after yesterday's MDP-induced drop. That's actually 'very good' plus in my book, but I don't see HI continuing to return 21%/year going forward.It's also in my retirement portfolio, and I'm also looking to raise cash for coming opportunities. So, as of yesterday, I have a limit order in to sell just below $31.I think, along with everything else, HI will be higher by the end of the year. And it goes ex-dividend in about 3 weeks. So I'm not in a hurry.All best!BRD
Hobed, Good post. I closely agree with you.I do wonder about point 2 though --- "...I tend to think of the stocks I hold as either excellent, very good, or average. "I'm wondering if you could expound on that? How is it that you don't view any stocks you own as below average? And I am wondering if you are talking solely MDP or if you are talking about a broader portfolio of personal selections?Regarding MDP choices, I think at the time of selection we think of our choices as Garrison Keillor might -- they all have that aura enough to warrant "above average" from the MDP majority. But things change. Over time it's clear that we end up with MDP losers. I don't think we should hold losers indefinitely --- I defer most decisions to the advisers and maintain a full portfolio, but I think we really do hold stocks that have gone sour too long. We're all reluctant to convert paper loss to real loss. Although HI was among stocks I believed were most likely sell candidates, it was not at the top of my list. I too take in to consideration if a stock has a decent dividend, whether it is tainted in fact of misdeeds, misjudgment, or things outside its control or even simply by strong negative sentiment. I try to validate my own opinions by one or more trusted third party opinions where possible.
I did not.DHeavy
Great points made above, but one I disagree with is looking at the current dividend yield relative to the price you paid. Maybe I'm overlooking something, but why would this be relevant to whether or not I should continue to hold a stock today?This seems like another psychological trick that can make one hold onto a stock when there may be other better alternatives available (better dividend yield, higher likelihood of dividend increase, greater chances of growth, greater downside protection due to underlying assets, etc.).I know nobody is suggesting using this as a single decision-making point, but I think the price I paid for a dividend stock has no bearing on whether or not I should continue to hold it, just like it should have no bearing on whether I continue to hold a non-dividend stock.For example:- I buy 10 shares of XYZ at $5/share.- XYZ's price has appreciated, and it's now $20/share.- The dividend yield is currently 1%.- The current yield is 4% relative to my initial purchase.That last bullet point is great for water cooler talk, but how/why should my buy price from the past (whether it was 10 years ago at $5 or last week at $21) impact my decision to hold XYZ today?I'm not just being modest when I say that posters who I've seen make such comments (Hobed, BRD, even the venerable TMF1000) are MUCH smarter investors than I am, but to me this makes no sense.So what am I overlooking?Cheers,Eric
MDP sold at $29.74 and the Sell Around was $33.25That doesn't feel much like "Around", but I'm getting used to missing out on numerous trades and subsequent gains from various services when members are told to use limit orders, but obviously don't as they rush into trades. The Fool services might be getting too big for their britches. If I can't trade within moments of an alert coming out I miss out on far too many trades. My biggest issues is with Options, but it happens in most services.AlasMike
Got the sell e-mail today time stamped 10:52 along with this messageHello! You're receiving this email today instead of yesterday because of an email system transition at Fool HQ. We're sorry for the disruption. Those issues have been resolved and your email delivery should be smooth now. James
Re: “I'm going to start calling MDP sell recs 'lemming alerts'. As soon as the alert hit my mailbox the chart fell off a cliff. So much for selling using a limit order. ”Here is a tune to hum the next time you see a sell request:http://www.youtube.com/watch?v=lhCKHLDBnwIHistorically, if someone built a portfolio based upon MDP’s sell recs, and purchased either at or below the team’s sale price, then they’d be significantly outperforming the MDP portfolio... Unfortunately the mad rush to get in or out often works against those who are in a hurry. I suspect that some of the best investors here have learned the art of patience and wait for their price targets... Hopefully luvtosew’s decision to wait until June works out well for him/her. Take care,RobearWho realizes past results are not necessarily indicative of future results; especially when you have a team that is always striving to improve.
Hi Eric-- You're not overlooking anything. The biggest factor in any sell decision (for me) is whether one thinks one can get better appreciation (through capital gains and dividends, if paid) elsewhere.However, in your example, you are continuing to get a 4% yield on your original $50 investment, regardless of the current stock price. And the dividend could have gone or could go up, of course.Last year I sold an HY Fund which was paying good dividends, but I thought it had topped out ("felt" is the better word). I reinvested the entire proceeds in FTR--primarily because of the yield, but also because I thought FTR's problems were overblown and possibilities underappreciated. The yield on my purchase price was in excess of 10%! (and the dividends were qualified, instead of unqualified, to boot). As we speak, my purchase is up 57% and the yield is down to 6.6%. Still good, of course--but if the yield drops in half, I may care more about continuing to receive the amount which was initially 10%+, than worrying about selling FTR for a stock which promises more capital appreciation. Or not. (I have a lot of FTR, paying me a substantial quarterly dividend. As I think about it, perhaps the amount is more relevant than the percentage.)There's no complete answer to your question, and no right or wrong answer. Yield on original price is just a factor which some like to consider, and others don't. Having said all that, 2 non-MDP stocks (but TMF favorites)--MIDD & OLED dropped so much more today that I decided not to wait on selling HI. Sold my whole position and put it equally into those two.What did Emerson say? 'Consistency is the hobgoblin of small minds.' Don't know the size of my mind, but I'm certainly not consistent!Best!BRD
Hobe,Thanks for sharing your "internal debate". You mentioned that HI was not part of the "core". I don't recall seeing that designation. Where can I find that information?"6. In case we're about to face a major market sell off, I've been slowly increasing my cash percentage. "Is there some analysis/insight to support this, or is it just a gut feel?Thanks,Steve
I still believe HI is a well run company with modest growth potential and a reliable dividend. So HI has a place in my portfolio, and I am keeping it, for the meantime. I have the luxury of being able to add more cash to my MDP portfolio, which MF does not. I look forward to the new picks from the MDP team.Jim
Re: "Unfortunately the mad rush to get in or out often works against those who are in a hurry. I suspect that some of the best investors here have learned the art of patience and wait for their price targets."Price of HI is now higher than it was when MDP issued their sell rec so I decided to sell half... I may keep the rest until I need funds for the next MDP purchase (or longer)Take care,Robear
I also sold half, to help fund my purchase of Amazon. I got lucky and bought AMZN on June 4, just before it jumped 20 points. I also have a limit order to pick up another chunk of WFM.GLTA
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