Ratings Updates: Sell CNXC and IBM
We’ve enjoyed a nice snap-back rally in the broad market in recent weeks. This has helped us recover some of the “lost” gains in older positions while pumping paper gains in newer ones.
With most prices a lot better now, we’ll take the opportunity to trim a few positions.
First up is Concentrix (CNXC), which we added in February. The company reported this week, and while results and guidance were fine, investors are taking a glass-half-empty perspective when thinking about management’s commentary around supply chain disruptions (impacting some clients), longer sales cycles (got shorter during COVID but stretching a little now) and dislocated/disrupted staff (none in Ukraine but plenty in the surrounding area). Stepping back, we entered CNXC as a trade idea because it had been a fairly stable stock during an iffy market early in 2022. Shares have sold-off post earnings so that dynamic is no longer holding up. We’ll exit with a roughly 15% loss. SELL
Second up is IBM (IBM). We entered this as a trade idea in December and rode it up into the end of the year, then back down in February. Shares have moved up nicely in March and we have a 6% gain. That’s not huge, but then we didn’t expect to crush it here. IBM is a very conservative idea and we’ve done well enough. Time to book the gain. SELL