TAKEING OFF THE TABLE

It seems to make sense to take some profit off the table here. The market has been going up non-stop for about 10 sessions, most of tech names I added late April has risen to more than 10%. It is the right and disciplined thing to do. On the other hand, the trend remains positive, economies grow with a decent pace, inflation, while that’s another story, valuation, even with this run-up, remains reasonable if not under-valued. Moreover, I already have about 25% in cash, and I am having a hard time to find names to add.

Second part of this question is which name to take it out. My inclination is to trim some STX, which has gone up by about 17% since I picked it up on April 20. One reason is that it is about 7.5% of the total portfolio. I probably would be more comfortable with half of that. Having said that, the valuation remains very reasonable, strong Q1/05, positive outlook, it is hard to part. Do I love this stock too much? The stock also behaves weak on a very strong market. Sold STX @21 (17.5%).

I am having a hard time to re-deploy the cash. I am about 30% in cash now which is not good. The problem with investing in Canada is that excluding financials (40%) and resources (40%), there is not much to pick. There are a couple of good earnings this morning, TD/NA all right, but I have enough financials already and I am not too keen of adding more, in view of the raising interest rate environment.

RET.NV.A

I did add some RET @16. I can hard find any weakness in this morning’s Q1/06 report. Sales, EBITDA, operating profits, earnings, all up significantly. The company has been growing consisitently in the past five years, and it reflects in its stock prices. Its ROE is at about 20%, and at currently level it has a yield of 2.25%. Balance sheet is clean with $80 million cash and minimum debt. I estimate it should be able to generate about 1.2-1.35 for fiscal year 2006. Targe at $20 by the end of calender year 2005.