My Personal Finance Journey

Personal finance observation, musing and decisions in a journey toward financial independence by 2020 with at least $3 million.


By Topics

Overall:
0. About (10)
1. My Progress (139)
2. Car & Home (107)
3. Credit (138)
4. Banking (33)
5. Saving (49)
6. Investing (308)
7. Taxes (89)
8. Spending (74)
9. Misc (97)
A. Archive (49)



MONTHLY ARCHIVE

Feb 2014 (3)
Jan 2014 (6)
Jan 2012 (1)
Apr 2011 (1)
Mar 2011 (1)
Feb 2011 (1)
Jan 2011 (1)
Dec 2010 (1)
Oct 2010 (1)
Sep 2010 (1)
Aug 2010 (1)
Jul 2010 (1)
Jun 2010 (1)
May 2010 (1)
Apr 2010 (1)
Mar 2010 (6)
Feb 2010 (2)
Jan 2010 (7)
Dec 2009 (3)
Feb 2009 (4)
Jan 2009 (8)
Dec 2008 (1)
Jun 2008 (2)
May 2008 (2)
Apr 2008 (5)
Feb 2008 (3)
Jan 2008 (15)
Dec 2007 (32)
Nov 2007 (6)
Oct 2007 (8)
Sep 2007 (9)
Aug 2007 (24)
Jul 2007 (2)
Jun 2007 (1)
May 2007 (3)
Apr 2007 (4)
Mar 2007 (4)
Feb 2007 (13)
Jan 2007 (6)
Dec 2006 (3)
Nov 2006 (7)
Oct 2006 (7)
Sep 2006 (6)
Aug 2006 (4)
Jul 2006 (10)
Jun 2006 (1)
May 2006 (3)
Apr 2006 (2)
Mar 2006 (6)
Feb 2006 (6)
Jan 2006 (3)
Dec 2005 (1)
Nov 2005 (9)
Oct 2005 (8)
Sep 2005 (13)
Aug 2005 (25)
Jul 2005 (16)
Jun 2005 (17)
May 2005 (19)
Apr 2005 (20)
Mar 2005 (24)
Feb 2005 (23)
Jan 2005 (36)
Dec 2004 (40)
Nov 2004 (34)
Oct 2004 (17)
Sep 2004 (21)
Aug 2004 (59)
Jul 2004 (37)
Jun 2004 (31)
May 2004 (29)
Apr 2004 (52)
Mar 2004 (49)
Feb 2004 (49)
Jan 2004 (31)
Dec 2003 (48)
Nov 2003 (52)
Oct 2003 (29)
Sep 2003 (8)
Aug 2003 (5)
Jul 2003 (2)
Jun 2003 (2)
May 2003 (5)
Apr 2003 (2)
Mar 2003 (2)
Feb 2003 (3)
Jan 2003 (29)



 

TRADE #35 - Sell CI 100s @ $56.291 in Datek

Contributed by mm | October 31, 2003 10:14 AM PST

CI sports an amazing 17% run today after it stampedes earnings estimate by reporting pro forma earnings of $1.45 vs consensus of $1.17 (earning release). With the climb, the stock has greatly surpassed my price target of $52. I decided to dispose all my positions because the current price does not offer sufficient margin of safety to compensate for the risks. I sold all my 100 shares at $56.291 each this morning. After $11.26 in commission and SEC fee, the net proceed is $5,618. It had been just a bit over a year after I bought the shares on October 25, 2002. The ARR for this roundtrip is 61%.

Admittedly, the potential sale of the retirement division may resolve some liquidity and ensure more dividend stability, although the impact is already somewhat reflected in the price.

In addition, before the sale I read the research note this morning from Smith Barney, which upgraded CI from 2H to 1H (buy-high risk) and raised price target to $61 (this upgrade itself adds fuel to the impressive climb). While the report raised earning forecast for all the way down to year 2006, I feel it is overly optimistic. I found some of the risks mentioned in the report are not fully justified in the current inflated price:

- Implementation risk: turnaround efforts seems to gain traction, but top-line growth may not be there until 2005.

- Reserves transparency: this greatly bothers me. Cigna is ranked lower than average in reserve revealation. It will be quite easy to manipulate earnings with reserve assumptions.

- Continued risk with run-off reinsurance business

- Dividend is somewhat in danger

- Management turnover

I might sell too early (like in the case of my Sears sale) in front of the upcoming retirement division sales, but the current price really makes me feel lack of safety margin.

Consequences of sale:

- With a capital gain of $2,057, I'm booking a $309 charge to my Tax Liabilities - Incurred account. The floating tax liabilities will be changed accordingly.

- I'll park the money in NetBank Money Market account unless I find some interesting stock ideas soon. This should assist my short-term liquidity.

More PFBlog Articles You Might Find Interesting ...



Read More ... 308 Posts In The Same Category










This page was last rebuilt at January 27, 2014 07:56 AM PST.
 

RSS FEED





PERSONAL FINANCE BLOGS I READ

Consumerism Commentary
Get Rich Slowly
My Money Blog
All Financial Matters
The Simple Dollar






.

Error 500 - Internal server error

Error 500 - Internal server error

An internal server error has occured!
Please try again later.



Copyright 2003-2014, PFBlog.com. All Rights Reserved. (Privacy Policy)