Monday, August 27, 2007

Sold Ansell

I just sold my 500 shares of Ansell @$A12.59. The stock spiked up 4-5% today and I'd been wondering recently whether to hold onto it. Some people are bullish on the stock but recently it has been negatively affected by fluctuations in the price of latex and the stock price has been pretty volatile. The company has a consistent growth plan and has been acting on it. I first bought the stock six years ago when it was in the middle of restructuring as a value/turnaround play. The company was formerly known as Pacfic Dunlop and produced everything from tires to clothing. The new focus was on gloves - surgical and industrial and condoms. The investment has been very successful yielding a total profit of $A9300 over those six years. Looking at the chart the stock has gone through five major waves a typical Elliott Wave signature of a complete bull run. Today the price was hitting the recent highs from several weeks ago after a dip as low as $A10.85.

When you are using margin as I am you need to evaluate each investment against your margin loan rate, which is currently 9.25%. I'm not certain that this investment can return more than that going forward, I'm bearish in the near term on the general stock market. I've had a great run in the stock and decided it was time to say goodbye. Yes I'll have to pay long-term capital gains tax though that is quite a way off. And because I have bought the stock and sold some now and then, only $A1500 is liable for tax, while I save the interest on all $6250 that I sold. And I received the dividend as the stock just went ex-dividend a couple of days ago.

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