SELL Fidelity International Small Cap Fund (FISMX) | Daily Alert June 3
Updated from WSBI 793, May 17, 2017
We’ve downgraded International Small Cap to Sell. Our decision comes down to its modest allocation to growth stocks generally, and its small technology exposure (just 8%), in particular.
Jack Bowers, John M. Boyd and John Bonnanzio, Fidelity Monitor & Insight, fidelitymonitor.com, 800-397-3094, June 2020
SELL LGI Homes, Inc. (LGIH) | Daily Alert June 8
LGI Homes is the tenth largest residential home builder in America. The company is currently building homes, primarily for first-time home buyers, in 19 U.S. states from coast to coast and the District of Columbia.
LGI Homes joined our portfolios in early December. We caught three run-ups since then, with a buy recommendation at early points in the run-ups, then moving to Hold recommendations at the peaks. Along the way, the earnings outlook slowed enough that the company does not present enough potential earnings growth to remain in the Growth Portfolio.
Therefore, I’m selling LGIH today. The stock peaked at 95 in February, and it’s possible that it will retrace that price soon, but I encourage you to sell by that point. Homebuilders don’t generally thrive during economic recessions, so caution is warranted. Sell.
Crista Huff, Cabot Undervalued Stocks Advisor, cabotwealth.com, 978-745-5532, May 27, 2020
SELL Atkore International Group Inc. (ATKR) | Daily Alert June 10
Updated from Wall Street’s Best Investments 811, November 14, 2018
Atkore International is being dropped from coverage because of its deteriorating profit outlook, reflecting a mixed construction environment. The company posted uneven March-quarter results partly because of unfavorable prices for steel and resin. Atkore has seen profit estimates for 2020 and 2021 tumble, dropping its Earnings Estimate score to 23.
Richard J. Moroney, CFA, Upside, upsidestocks.com, 800-233-5922, June 1, 2020
Sell: Community Healthcare Trust Incorporated (CHCT) | Daily Alert June 16
Updated from Wall Street’s Best Dividend Investor 309 June 12, 2018
Community Health Trust, fast-growing small healthcare REIT, is benefitting from the recent upward thrust in the market. It’s up over 13% just this month. While the underlying business is in defensive health care properties, the stock is a lot more cyclical because it is a small, lesser known REIT. This is a stock that in the near term will mimic, and indeed exaggerate, the whims of the market. Since I believe the market to be precarious at this point, I will sell the remaining one third position while the getting is good—with a 31% return in two years on the remaining position. Nice profits have already been realized on two thirds of the position during the boom times. But I see the remaining third as a prudent place to pull back right now. SELL.
Tom Hutchinson, Cabot Dividend Investor, cabotwealth.com, 978-745-5532, June 10, 2020
*SELL Preferred Apartment Communities, Inc. (APTS)
Updated from WSBI 825, January 16, 2020 Preferred Apartment Communities has some vulnerability, if some colleges continue with on-line classes this fall; could hit rentals income in student housing. I’m thinking ever more (and so, clearly, are others) that such aggressive and active diversification—sensible in a healthy economy—may leave APTS overextended and vulnerable.
Chris Temple, The National Investor, nationalinvestor.com, 224-308-2587, June 9, 2020