Trade Alert: Up 39% in 4 months I'm taking profit on my earlier stock pick of Tokyo Electron

For those of you who follow my blog you may recall a stock pick I made back in July of this year, Tokyo Electron (OTC:TOELY) . You can read the original post about why I was investing in this little known Japanese company here.

As outlined in my post, I bought the stock at a price of $38.32 on July 12th of this year based on the hypothesis that like many other Japanese public companies it was significantly undervalued. I also liked its low debt and the international nature of its business.

Now that the stock has appreciated, currently trading at $53.36 (as of November 18th, 2019) and up 39% since my purchase four months ago I've decided now is a good time to take profit and sell my position.

When I purchased Tokyo Electron in July its forward P/E ratio was 15.77, today is at 21.65 and the company appears to be more properly valued by the market. Because I feel my original hypothesis has been realized I am now exiting the stock.

It's certainly possible there is more runway with this stock but I'm practicing the important investing credo of don't be greedy. I am pleased with the return and happy to have the cash in my account as the markets reach new highs. I am not predicting a market downturn is imminent per se, I am certainly not qualified to attempt such a prognosis. However, I do feel now is a good time to have some cash on the sidelines whenever the inevitable downturn strikes - whether that's a week, six month or a couple years out.

If you prefer to reinvest your profits, check out my most recent stock idea of an investment bank that has grown its dividend 7 times since going public 4 years ago. You can read the full blog post here.

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