I used last two months to reduce a large position in AZJ. AZJ...

I used last two months to reduce a large position in AZJ. AZJ was nearly 5% of the portfolio. I have brought it back to 1% of the portfolio.

Whilst I still like the long term characteristics of AZJ several doubts have crept into my mind as to the wisdom of having such a dominant position in the portfolio (5% is a dominant position for me).

Doubts:
*Higher interest rates for longer, AZJ has jumped significantly in the last year and debt is expected to increase further in future years. With rising interest rates (higher than I expected last year), I am nervous of company leverage.
*The 'build' and they will come approach in their bulk division. Alot of capex coming. Remember in an inflationary world excessive cap ex is risky as costs keep rising and capex costs rise faster than depreciation (hence the inflation!!!)

I still hold a position, but happier with a smaller position.

One thought process (not a very nice one), keep the smaller size position, let the company spend its money on cap ex expansion, dividends will be curtailed during this period. And just wait. Less risk as can see how the success of the cap ex spend plays out.

With its change of strategy AZJ is going to be a story (but not proven) stock out to FY2030, thats a long long time. I prefer hard numbers and the business case being proven by financial facts.