Here is the blog link: http://chumpmenudo.blogspot.com/2014/09/stock-swap-today-vmi-alk.html
Both were paying the same dividend yield (1.1%), but I really like ALK's growth prospects vs. the headwinds that VMI was facing.
2 months later, here is the result:
- VMI closed today at $136.42, up 1.9% since 9/23/14
- ALK closed today at $54.50, up 23.6% since 9/23/14
When I sold VMI, I took a loss on the investment. But holding a stock that's down, and waiting for it to come back, is foolish if there is a better investment available, as this example shows. This is why its important to keep track of your portfolio, constantly looking at valuation and growth prospects, and to run screens, always on the lookout for better investments, or upgrades to existing holdings.
A full position in the portfolio is around $18, 000. I established my ALK position with a 2/3 investment at around $45, then added another 1/3 when the stock dropped to around $41. My total cost for a full position sits at $43.85. My return so far is 24.3%.
- Holding VMI, my position would have grown $342
- My ALK investment has grown $4,374