Portfolio Transaction
On Sep 16, 2015, we sold NPK (National Presto) stock at $84/share. This sale resulted in 43.26% total return. The NPK stock predates the start of the Value Stock Guide service and therefore has been one of the longer held stock for us, having initially purchased on Sep 30, 2009.
Late last year the stock had declined to a low in the $50s. We added to our position at $57.20/share. As the stock regained its rightful place in the $80s, we decided to exit the position so we can free up some capital to take advantage of the minor market crisis that we have seen in the last few months. Please note that this transaction does not reflect on the valuation of NPK in my opinion, but rather is a relative valuation trade.
The average cost of the stock was $79.88/share. About $31/share in total return came from the dividends the company has paid in the last 6 years we have held the stock.
Brief Word on the Recent Market Volatility
I get a feel for what my readers are thinking based on the emails I get from them. This year has been very volatile in the market, and specifically the small cap stocks have underperformed for the last year and half. It is great to see that the tenor of most of the emails I get has been so far inquiring about where new opportunities may lie. Yes, there has been some concern as can be expected, but the majority that have interacted with me have shown a solid long term orientation and an understanding that market ups and downs are normal part of the investment process.
I just want to reiterate that short term market volatility is not a judgment on real values. We do not invest based on consensus opinions and neither should you. Trust your own due diligence.
