13 October 2010 Coke and Drugs and Hot Flashes
Do things still go better with CocaCola?
With the market being up this morning, I had to take a peak at our portfolio. We have averaged into this stock (KO) since May. (AVG cost is $51.92) which reflects a 16% gain in 4 and half months. We are seeing the margin of safety get squeezed. When we pimped this stock back on May 19, we did not indicate a target price, but would have been shooting for at least 6% by years end. (The 10 year yield was about 3 at the time) We are well past that. If you got in with me, you might consider pulling the trigger and taking some profit.
After reading a lot tonight, we got Motley saying commodities (sugars) will impact the bottom line. Then we have Cramer buy buy buying (He picked up another 300 shares today making it about 3.1% of his portfolio). Berkshire (Buffet) has not sold any, BUT (Behold the Underlying Truth), we have made some nice money. We are going to break out our stops and put a stop limit in for 20% of our holdings at 60 and put a stop order on the balance for $54.50.
Skimming the Cream
We did get to skim the cream at KO and we also took some nice profit off the top in a couple other that have reduced their margin of safety. We sold off 16 % of our MDR after a 31% gain. We also sold off 20% of our CAN holding after seeing a 21% gain. After the sales, we rest our stops to protect these nice gains.
I need some drugs baby!
We have a reader asking for a couple of ideas about pharms. We will be doing homework tonight and probably through the weekend. If you have any you like or are curious about, please let me know. I’ll include it in the homework. I am currently considering NVO, TEVA, FRX, VRTX, WCRX, PFE, JNJ (we have a coupld of calls on this), ABT, LLY, NVS, JAZZ, RDY, WCRX, AZN, SNTS, ENDP, and DEPO.