Friday, November 21, 2014

VMI vs. ALK - 2 Months Later

Two months back, September 23, I blogged that I would swap my VMI position for a position in Alaska Airlines, ALK.

Here is the blog link:

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


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