This morning I sold my entire RL holding of $WTC for $96.00. The basis of the change in my valuation is set out separately in my valuation post. (I admit to feeling a bit foolish in having got caught up in the group think of the many recent analyst upgrades, which caused me to overlook some things in plain sight.)
I consider $WTC to be one of the best companies on the ASX, however, my assessment of valuation risks to the downside of the price received this morning, meant that my criteria for selling (set out recently in the "When to Sell" forum) was triggered. While I am aware of the potential folly of selling your winners, this is the fourth time since 2016 that I have done this for $WTC and the decisions to date have all been sound and turbocharged my returns. Of course, I might be completely wrong this time. Only time will tell.
Put simply, with a forward p/e of 118x (and this is a firm that is well past the inflection point), but only having achieved 15% organic revenue growth in the latest half over pcp, it would not take much for a material correction to the SP. History indicates there is a high likelihood of that happening - of course the past is no guarantee of the future.
It was a hard decision to take, but ultimately I am driven by my analysis and assessment of risk-reward.
Disc: No longer held. On watch list
