Some great discussions here around selling strategies when sitting on a large gain. For what it's worth (and certainly not advice) my approach is the following:
- How does the current market cap compare with an updated conservative valuation? If it's still undervalued the most logical thing to do is to continue holding. If it's now approaching fair value consider selling some or all of the holding.
- If still undervalued, given that the market cap has increased significantly, what percentage of your portfolio is it currently? Everyone will have different risk thresholds, however if it is above your risk threshold but still undervalued, consider selling a portion down to your risk threshold level.
In practice this has meant that I've sold around 30% of my nhc holding over the last 6 months as it became an increasingly large percentage of my portfolio, even though (in my opinion) it is still undervalued. Was still bullish coal so moved some proceeds into whc around 6 months ago. My whc holding is not that large so even with the big increase it's well within my tolerance level for one stock, hence still holding. From a valuation perspective it still holds some value (from my perspective) however I will certainly be considering selling around $15.
I find this method naturally locks in some profits after big increases.
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Last
$6.94 |
Change
0.230(3.43%) |
Mkt cap ! $5.806B |
Open | High | Low | Value | Volume |
$6.88 | $7.00 | $6.76 | $71.46M | 10.36M |
Buyers (Bids)
No. | Vol. | Price($) |
---|---|---|
6 | 156495 | $6.93 |
Sellers (Offers)
Price($) | Vol. | No. |
---|---|---|
$6.94 | 364735 | 1 |
View Market Depth
No. | Vol. | Price($) |
---|---|---|
3 | 5060 | 7.120 |
1 | 7351 | 7.070 |
2 | 2269 | 7.050 |
3 | 4550 | 7.000 |
2 | 10358 | 6.980 |
Price($) | Vol. | No. |
---|---|---|
6.600 | 10705 | 3 |
6.720 | 23 | 2 |
6.770 | 299 | 1 |
6.840 | 92 | 1 |
6.940 | 640 | 1 |
Last trade - 16.10pm 26/09/2024 (20 minute delay) ? |
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WHC (ASX) Chart |