Wednesday, December 26, 2007

Bookkeeping: Taking Some Profits in Huron Consulting (HURN) and Mechel (MTL)

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Both these positions have worked out splendidly...
  1. With Huron Consulting (HURN) in 7 sessions we've seen a run from $72 to $83 (15%)... for a sleepy consulting stock that's quite a move so I want to lock in some of these gains as this has turned into my #2 long position and I have yet to sell a single share. Further, on the technical side the stock has now reached levels seen in late October before its earnings swoon so if it doesn't break out here, it will have made a 'double top'. I am not saying that is what is going to happen but without a further move upward it will, but always prudent to book profits along the way - especially when I don't like the market overall. So I will sell 75 of my 450 shares (17% of position) near $83, and move this name from 3.0% of the portfolio to 2.5%. Barring inability to perform I do plan on holding this name for quite a while as a play on the coming restructurings in corporate America in 2008/2009 in a slow growth economy.
  2. Mechel (MTL), the Russian steel/iron ore/coal company continues to be one of my favorites, but in 4 sessions we've gone from $90 to $102 (13%) and very similar to Huron we might be forming a double top here, as the stock peaked here around $104 back on December 10th. Too early to tell on this name either, and in a market I trusted more I'd be more apt to let these names run, but going into January earnings seasons, and with the technical positions on the major indexes right at previously noted resistance I am going to take some profits along the way. I've dropped Mechel from a 2.3% position to 1.6% position by selling 75 of my 275 shares (33%) here at $102.
I like both companies, and will continue to like them. Much like the fertilizer and solar names - I just am taking profits when offered along the way as has been my strategy from day 1. Make sales when you can, not when you are forced to. (i.e. in a major downturn). I will look to add back to these positions on the inevitable corrections.

Long both names in fund; no personal position




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