Sometimes we get so focused on acquiring shares with good growth potential that we forget to cash in on when we can.
The buy on a low, sell on a high mentality is fruitless unless you actually take some profits – which you can of course reinvest back into the market if you like.
But many investors busy scoping the market for new buy ins often forget this crucial step to investing success.
Don’t just look for buy opportunities – be on the lookout for sells too.
I think it might be time to lock in some profit from these 3 S&P/ASX 200 players.
Remember, you don’t have to sell your entire holding.
Domino’s Pizza Enterprises Ltd (ASX: DMP)
Shares in pizza outlet and franchise service Domino’s Pizza Enterprises Ltd have been climbing of late, at $52.98 at the time of writing – a substantial recovery from a share price dip in late April down to $38.93.
But is it time to make some sales for Domino’s shareholders?
Positive broker reports in recent weeks have coincided with a share price revival for Domino’s with most analysts pointing to sales growth during the soccer World Cup as behind the surge.
But the good days won’t last forever for a stock on a price/earnings multiple above 40 times.
Domino’s looks a bit expensive at present, which is a great time to sell some and a bad time to buy in my opinion.
Many investors might be keen to wait until its full-year results in August are handed down to decide whether or not to pull the pin, but things could go either way with that, so I think it would be prudent to take some gains now if you’re in a position.
Healthscope Ltd (ASX: HSO)
Shares in private healthcare operator Healthscope Ltd have enjoyed a pretty good run in the last few months, with today’s share price of $2.28 up from a late April low of $2.03.
Recently Healthscope has received two takeover offers, but its board has turned suitors away from completing their due diligence as it undertakes its own strategic review of its hospital property portfolio.
This is all well and good, but would the recent share price surges even have occurred if interest from Brookfield or BGH Australian Super Consortium were not in the peripheral?
Healthscope has suffered lately in the shadow of Ramsay Health Care Limited (ASX: RHC) – closing its underperforming hospitals and battling structural changes in the industry.
With some brokers suggesting Healthcope Ltd shares are likely to trade under $2 sometime soon I think now might be the time to consider taking some profits.
Wesfarmers Ltd (ASX: WES)
I consider Wesfarmers Ltd a pretty solid blue-chip share, and one you should have in your basket of stocks to kickstart your retirement fund.
But if you’ve been holding Wesfarmers shares for some time, now might be the time to gather some gains for reinvestment and leave some in the kitty.
Wesfarmers has completed the divestment of its UK and Ireland home improvement business Homebase – no doubt an anchor which has been dragging the conglomerate down – with the loss on disposal to be recorded in FY18’s results.
Investors have responded well to the offloading, with Wesfarmers shares soaring to 52-week highs this month, up 0.6% to $47.61 at the time of writing – a nice rise of 17.2% from its $40.61 share price at this time last year.
A cautious investor would lock in some profits now before retail spending figures could knock Wesfarmers off its block.
This strong price run probably won’t last for much longer.
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Motley Fool contributor Carin Pickworth has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Wesfarmers Limited. The Motley Fool Australia has recommended Domino's Pizza Enterprises Limited and Ramsay Health Care Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.