TRADE #40 - Sell OCA 500s @ $8.65 in Roth IRA
To capitalize the multi-week runup of OCA and mitigate my portfolio's significant exposure on a single issue, I sold 500 shares in my Roth IRA account at $8.65 apiece. I still hold 1,000 shares of OCA in my Datek account.
This selling price marks a 29% profit in less than a year (I bought this block of OCA shares back in May 2003 at $6.68.) Also, my remaining OCA shares, purchased at a lower $4.76/share, is sitting on top of 82% profit now, making OCA my most profitable investment so far.
However, it should be noted that this is really a choppy ride: after I made the one-two purchase of 1,500 shares, it climbed to $8 by June, tested $7 by August, barely touched $9 in October and November, went back to below $7 in December but soon returned to $8 in January, only to dropped to almost $6 in March before sporting a nice jump of 40% in the last two weeks.
In retrospect, I feel glad I did the bottom-fishing a year ago. OCA is not fundamentally attractive because of its stagnant growth and receivable worries, but it is no wear to go bankrupt, as suggested by the massive short positions. My fair value estimate for OCA is $9 to $10 and I really do not see much downside moving forward (although not much upside too). For now, I can comfortably hold my remaining 1,000 shares (which will turn into long-term capital gain status within two weeks) and see what will happen next.
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