Sold 200 shares in my IBM ESPP
I have received many comments over the past year about the large amount of company stock I am holding in my ESPP (employee stock purchase plan). Commentors espoused the virtues of diversification and mentioned the risk of double damage between losing my job and losing my savings should something unexpected happen with the company.
While I agree with just about all the reasons to diversify and in general not hold large quantities of company stock I held tight and continued participating in the ESPP. I couldn't bring myself to sell the stock as I just thought it was too undervalued.
While there was some uncertainty about the business I had confidence that the company's management team was doing the right things to sustain the business. The P/E on the stock was recently as low as 11.2 on the estimated earnings for 2007. That means for every dollar invested in the company was earning a ROI of nearly 9% the 1st year and more the next. For a company in solid shape and in confidence of the changes that were happening that would improve the business I felt it was a no-brainer to hold onto my stock while it was so undervalued.
Well in the last couple weeks the stock price has been on a roll. Last week 3Q earning were announced above expectations and the stock jumped up even more. The stock went from $73 in July to $89-91 last week. After earnings I felt the stock was now more fairly valued. Things are now looking a little brighter at IBM and I hope the momentum continues.
I decided to sell 200 shares of IBM stock in my ESPP. I don't think the stock is overvalued, but I think it is now more fairly valued than it has been in a long time. I don't know if the stock is going to go up or down from here. I fully hope the stock will continue to go up, but in the mean time I felt it was now time to increase my diversification.
I sold 200 shares in my IBM ESPP for $90.97/share - $29.95 sale fee. Now I need to start thinking about what to do with my new found cash. I have suddenly gone from cash poor to cash flush.
Related in Stocks:
Chairmen Letters to Shareholders (Mar 09, 2014) Its that time of year again --the close of fiscal years means an overload of annual reports including Letters to Shareholders. Two annual letters that I read each year are those from Berkshire Hathaway (Warren Buffet) and Fairfax Financial (Prem...
Investment Performance January 2014 (-2.94%) (Feb 23, 2014) January 2014 Investment Report: January Highlights: January was a bad way to start out the year, but our portfolio performed slightly better thank our benchmark (-2.94% vs -3.17%). We made our regular monthly investments in our Roth IRAs, and some...
Investment Performance December 2013 (+2.20%) (Jan 10, 2014) December 2013 Investment Report: December Highlights: December was another subpar for us as our portfolio performed poorly compared to our benchmark (+2.20% vs +2.58%). We made our regular monthly investments in our Roth IRAs, and some dividends & dividend reinvestments....