Sell, Sell, Sold
Good Day
Today I was lucky enough to have a stock jump 19.43% in one day. I’m currently 25.08% up on this stock since I purchased them at the beginning of the year.
In August Aecon mentioned they were looking into selling the company to create some great shareholder value. The stock quickly jumped 12% on the news. I debated selling. Various sources said Aecon could range from 17$- 25 a share in a buyout. The stock slowly started pulling back and I kinda regretted not taking the profits.
This has happened for a couple stocks I bought low. Richie Bros, Cineplex and IBM. They are still all up but I could of sold in a quick period of time for a easy 10% gain. I’m not a buy and sell guy but clearly I could of sold and bought when the hot news slowly wore off and the stock pulled back again.
Sell, Sell, Sold
I have decided to sell my entire position in Aecon for a capital gain of $767.56 and 3 quarters of dividends ($72.01). This brings my total profit to $839.57 in less than a year. A 27.43 percent increase! This entire position was held in my Tfsa, so it is tax free. Thanks a lot Aecon, you really did increase shareholder value.
Now you may be asking what happened to cause the stock to skyrocket that much in one day. Well A Chinese construction firm – CCCC International has agreed to pay $20.37 per Aecon share in cash to buy the Canadian construction company.
The offer requires the approval of two-thirds of the votes cast at a special meeting of Aecon shareholders as well as government and regulatory approvals under the Investment Canada Act, the Canadian Competition Act and authorities in China.
I sold all my shares at $19.73 per share, yes maybe I left some money on the table. I could wait for all the approvals and the shareholders to approve the deal. Then if everything went smooth the deal could close beginning of next year. What if it doesn’t though?
Dividend’s to Replace
Aecon’s yield on cost for me was 3.17% and generated $97.00 in annual dividends. I will miss this dividend especially the months that it paid out in – January, April, July and October. My industrial sector will also take a nice hit with this sale. Luckily there is always a deal in the market just need to search harder these days.
Congrats to all the Aecon shareholders out there. Are you going to keep holding the stock or lock in some profits?
Cheers!
Hey I’m Rob, creator of Passive Canadian Income.
In 2011 me and my wife had almost $60,000 in debt and a negative $7,000 Net Worth. Through hard work and financial education we paid all that off. Now we are focusing on increasing our Passive Income Streams to make the money work for us. Feel Free to Follow along the Journey by clicking the Social Media links below or subscribing to get notified of new posts on the sidebar.
Great news for you. I love when you have a stock that jumps like that.
I would sell it as well.
Actuality i have a bit of a rule that when a stock jump up more then 11% in one day i sell it right away.(Unless im still down)
Reason being what more could i want 12% ? less not be greedy.
Do you have any rules like that by chance?
Russ
Hey Russell thanks. That sounds like a great rule. Unforetunately i dont have any rules like that. I just freestyle currently but i really do like your rule. Thanks for swinging by!
Congrats on the pop and booking those profits, PCI. Cant complain when your stocks rise so much and the market is offering you a good ROI.
Best wishes
R2R
Hey Road thanks alot, yeah no complaints here. Ok one why isnt cnr cheaper? Haha
For me it’s often a double feeling when a company is going to be taken over. The good feeling is that it’s resulting in a profit due to the stock price increase. The bad feeling is that it’s often one of the more solid companies out of my portfolio which are taken over so it’s difficult in this market to find a new company replacing the dividend.
Hey Erik soooo true. And based on my now hole in the industrial sector its even harder… time will tell. At least i just got aecons dividend. So i got 3 months to replace it =)
Absolutely nothing wrong with taking profits PCI. I don’t own the stock, but congrats on what appears to be a successful trade.
Thx port. The dividend will be missed..
Nice return, I think you did the right thing by selling. Why wait all that time for a little bit of money, and like you said what if the sale doesn’t go through. I look forward to reading about the stock you buy to replace Aecon.
Hry Matt thanks alot man. Yeah i saw some headline on some paper about the deal.might not go down because of something with that chinese company. Then ill rebuy and wait for another suitor lol
Nice return from this deal! Any ideas where you’re going to allocate that cash?
Hey dis right now im just searching around. If i could get us stocks id buy some more cvs after the bigger pullback but want to keep it in the tfsa. Also id love to keep it in the industrial sector. If not maybe altagas, algonquin or some other. Im in no rush just waiting for a good deal. Cheers!
Sure you may have left a few dollars on the table. But man do acquisitions take a long time to complete. The approval process is not fast and these things can take several months. So you cash is locked up in the position for that period of time just sitting there. Now, you were able to benefit from the gain and move the cash into another position. I love that the transaction is tax-free as well. Congrats on the move!
Bert
Thanks alot Bert! Always great hearing i made the right move.
If I own the stock, I would of sold it too. From your selling price, you are only leaving about 3% on the table. What if the Canadian government doesn’t approve? Why take the chance, just lock in the gain and move on.
I own SNC lavalin. Even though it did not get any buy out offer, it still got a little pop because of Aegon. Congrats.
Hey Leo thanks. Yeah i looked at snc. Love its dividend growth history just not a great deal to buy atm.
Sometimes, when the price is so high and the company is getting bought by a foreign company, it is nice to get rid of the shares. If everything goes well, then you can buy them later. God work on getting the profit.
So true. Thanks Pell!