I am closing a medium sized (1.2% exposure) position in Mylan (MYL) which was a generic drug maker we bought for conservatism and exposure to the health care field not too long ago. We are taking a small loss of $300. As you can see the chart has taken a turn for the worse, despite being in the "right" sector. ("right" is of course changing every 3-4 days)
I've spent some time during my staycation looking for new ideas and came across a dozen candidates, mostly in the small cap to smallish mid cap space - so this move is related to those potential candidates. I want to cull long positions (and did quite a bit last week) and clear space for new names - I'm waiting for some of these dirty dozen to pullback. One such name was Thoratec (THOR) which we highlighted just a month ago at $23, and is now $27. [Aug 4: One for the Radar - Thoratec] Should of pulled the trigger.
Another was Embraer (ERJ) which we highlighted less than 2 months ago at $27, and is now approaching $35. [Jul 8: Has Embraer Hit Bottom?] I'm kicking myself on that one as well.
Finding consistent winners in this market is very difficult but they are out there. I've found some new candidates and most have excellent charts in uptrends, so despite some "pricey" valuations in this new group, I'm going to begin adding some on the next pullback since stocks going up in an environment like this should do very well in a more benign environment. Most are also of the smaller cap variety where one can find opportunities in less known names. So we're cutting Mylan as we look ahead to the future - as we still want to keep concentrated and not sit with 60+ long positions down the road.
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