The concept of selling shareholdings scares many investors. What happens if the company you originally believed in really rockets up and you’ve sold out too early? What about the pesky capital gains tax you have to pay? But the trick in taking profit is that you don’t have to dump your entire holding, nor does selling mean you don’t believe in the company any more. You can sell off parts of your interests and still keep some skin in the game. You can even use your earnings to buy back in when the stock sinks lower again. Either way, you…
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The concept of selling shareholdings scares many investors.
What happens if the company you originally believed in really rockets up and you’ve sold out too early?
What about the pesky capital gains tax you have to pay?
But the trick in taking profit is that you don’t have to dump your entire holding, nor does selling mean you don’t believe in the company any more.
You can sell off parts of your interests and still keep some skin in the game.
You can even use your earnings to buy back in when the stock sinks lower again.
Either way, you can usually find money within your current holdings to fund your new investment interests by selling part of your shareholdings on highs and keeping your books in the black.
These are the 3 stocks I’d think about selling some of this week.
Kogan.com Ltd (ASX: KGN)
Shares in online retail business Kogan.com Ltd are up 0.9% to $7.26 at the time of writing after dropping back from a 52-week high of $9.80 on June 4.
Investors have gone slightly cold on the stock since Kogan’s CEO and CFO collectively sold around 6 million shares earlier this month, despite its dominance in the online retail market.
Kogan released a statement that its key players remained “fully committed” to the business after the sale with “the vast majority of their personal wealth” still invested in the business, but investors have understandably remained spooked.
The launch of Amazon Prime in Australia could see Kogan’s margins suffer, with more traditional retailers JB Hi-Fi Limited (ASX: JBH) and Harvey Norman Holdings Limited (ASX: HVN) also likely to take a hit from this news.
In my opinion, some profit taking from Kogan wouldn’t hurt right now, even if it means buying back in if the shares bottom out from industry pressures sometimes soon.
Certainly, one to watch for shareholders.
Qantas Airways Limited (ASX: QAN)
The airline environment is a volatile one, and shares in Qantas Airways Limited look a bit high right now if you ask me.
They reached a 52-week high on June 21 at $6.71 and are up again 1.3% to $6.64 in early morning trade today, but I think uncertainty in the sector, higher fuel prices and pressure from competitors is enough to warrant at least some sort of sell-off for many shareholders – depending on what price they bought in at.
Qantas’ isn’t really a company that is well-positioned for a market downturn and if I had profits to take from them right now I’d be thinking about putting something into industry peer Webjet Limited (ASX: WEB) or even Flight Centre Travel Group Ltd (ASX: FLT) for those keen to stay in the travel sector.
St Barbara Ltd (ASX: SBM)
Shares in Australian gold producer and explorer St Barbara Ltd are up 1.1% to $4.93 at the time of writing as the company hovers in 52-week high territory.
But is it time to take some profit?
St Barbara has had a good couple of years, with production in its Western Australian and Papua New Guinea operations tracking along well and some upside seen from a lower Australian dollar.
But a pullback could be on the cards if the US dollar goes much higher and I think it would be prudent to consider taking some gains home from St Barbara sometime soon.
Remember, buying on a low and selling on a high only works if you actually remember to sell some shares occasionally.
With some profits on board you might be able to pick up a good dividend-paying stock to fill any gaps in your portfolio.
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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 Flight Centre Travel Group Limited. The Motley Fool Australia has recommended Kogan.com ltd and Webjet Ltd. 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.