To assess whether it's a good time to sell your shares in Company Z, I’ll need some specific details about the company and your investment objectives. Here’s what I need from you to make a proper value-investing judgment:
๐ Please provide the following:
- Company Z’s full name or
ticker symbol
- Your
purchase price and
purchase date (optional, but helps estimate capital gain/loss)
- Your
investment goal:
- Long-term
compounder?
- Income
from dividends?
- Capital
gains?
- Reason
for considering a sale:
- Do
you think it’s overvalued?
- Has
the business
quality declined?
- Are
you seeing better
investment opportunities?
๐ง Key Value Investing Sell Criteria
Based on the value-investing principles, here are legitimate
reasons to sell
a stock:
- ✅
You find a better
opportunity (higher intrinsic value vs price).
- ✅
The business is losing
its competitive advantage (e.g., market share loss, poor
capital allocation).
- ✅
The stock is significantly
overvalued (e.g., P/E over 40, pricing implies unrealistic
growth).
- ✅
Accounting red flags
or management issues appear.
- ๐ซ
You should not sell
purely due to:
- Short-term
price drops.
- Market
noise or media sentiment.
- “Getting
bored” of holding.
Once you provide the company details, I will:
- Analyze
its intrinsic value
using valuation ratios (EV/EBIT, P/E, FCF yield).
- Assess
business quality
(ROA, ROIC, moat, management).
- Examine
growth prospects.
- Compare
to alternative
investment opportunities.
- Conclude
with a Value
Investing Score and sell/hold/buy recommendation.
Would you like to proceed by providing that info?
To assess whether it's a good time to sell your shares in Company Z, I’ll need some specific details about the company and your investment objectives. Here’s what I need from you to make a proper value-investing judgment:
๐ Please provide the following:
- Company Z’s full name or
ticker symbol
- Your
purchase price and
purchase date (optional, but helps estimate capital gain/loss)
- Your
investment goal:
- Long-term
compounder?
- Income
from dividends?
- Capital
gains?
- Reason
for considering a sale:
- Do
you think it’s overvalued?
- Has
the business
quality declined?
- Are
you seeing better
investment opportunities?
๐ง Key Value Investing Sell Criteria
Based on the value-investing principles, here are legitimate
reasons to sell
a stock:
- ✅
You find a better
opportunity (higher intrinsic value vs price).
- ✅
The business is losing
its competitive advantage (e.g., market share loss, poor
capital allocation).
- ✅
The stock is significantly
overvalued (e.g., P/E over 40, pricing implies unrealistic
growth).
- ✅
Accounting red flags
or management issues appear.
- ๐ซ
You should not sell
purely due to:
- Short-term
price drops.
- Market
noise or media sentiment.
- “Getting
bored” of holding.
Once you provide the company details, I will:
- Analyze
its intrinsic value
using valuation ratios (EV/EBIT, P/E, FCF yield).
- Assess
business quality
(ROA, ROIC, moat, management).
- Examine
growth prospects.
- Compare
to alternative
investment opportunities.
- Conclude
with a Value
Investing Score and sell/hold/buy recommendation.
Would you like to proceed by providing that info?
We'll create a sample case using a fictional version of a real company to
help you learn.
๐งช Example: Should I Sell My Shares
in “Company Z”?
Let’s assume:
- Company Z = Zoom Video Communications
(Ticker: ZM)
- Purchase Price =
$300 per share
- Current Price =
$70 per share
- Time Held = 3
years
- Investor Goal:
Long-term compounder (10%+ annual return)
๐ง Step-by-Step Analysis
✅ 1. Is the Business Still
High-Quality?
- Moat: Weakening —
strong during COVID, but facing fierce competition from Microsoft Teams
and Google Meet.
- ROA: Dropped from
~10% to under 3% (declining efficiency).
- Revenue Growth:
Slowing drastically post-pandemic.
๐ Conclusion: Business quality is deteriorating.
Not a wide moat company anymore.
๐ 2. Is the Stock Overvalued or
Undervalued?
- P/E Ratio: ~16
(not expensive, but depends on future earnings stability)
- FCF Yield: Decent
(~5–6%) — suggests it's not hugely overvalued
- EV/EBIT:
Acceptable, but growth outlook doesn't justify a higher multiple
๐ Conclusion: Valuation is fair, but future growth outlook is weak.
๐ 3. Are There Better
Opportunities?
Let’s say you find Adobe (ADBE) or Visa (V) — both with:
- Consistent
10–15% earnings growth
- Strong
ROIC and competitive advantages
- Better
reinvestment opportunities
⚠️ That may justify selling Zoom to fund those instead.
๐ 4. Is There a Risk of Permanent
Capital Loss?
- Demand
is shrinking
- Margins
are compressing
- Competition
is increasing
๐จ If intrinsic value is
shrinking, it’s not just a temporary dip — it could be a value trap.
๐งพ Final Decision: SELL
Why?
- Business
fundamentals have weakened
significantly
- Stock
isn’t undervalued
enough to justify the risks
- There
are better
compounders available
- Opportunity
cost of holding is too high
๐งฎ Value Investing Summary:
|
Factor |
Score
(/5) |
|
Business Quality |
2 |
|
Financial Health |
3 |
|
Valuation |
3 |
|
Moat / Competitive Advantage |
2 |
|
Reinvestment Potential |
2 |
|
Total
(out of 25) |
12/25 |
|
Verdict |
Sell |
Would you like to try this process with a real company you own or
are watching?
If yes, just give me the name/ticker,
and I’ll walk you through it live.