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August 04, 2006

Taking Profits on Motorola

After much gut-wrenching action and analysis, I decided to take profits on Motorola (MOT) after owning it in most client accounts for almost two years. The stock has rebounded from $19 to over $23 since the company reported its excellent second-quarter results and raised guidance. I still think that MOT is back, and the Street is finally giving the stock some respect, but I am concerned that some of the data points indicating a tougher second half for handset sales may prove true. Two colleagues at StreetInsight.com that I really respect, Tero Kuttinen and Bob Faulkner, have discussed this possibility. I suspect that MOT will continue to gain share and any modest handset market weakness won't impact it. In the end, MOT has been a tough stock to own, and now that it has moved up back up to a level more in line with its strong fundamentals, I don't feel I have an edge. Northlake’s ETF-driven strategy only leaves room for a limited number of individual stocks. Conseqeuntely, I try to only own stocks in which I feel I have an edge. That is no longer the case for MOT so it is time take the sizable profit and move on.

Posted by Steve Birenberg at August 4, 2006 09:05 AM in MOT