Trade: On Semiconductor

Stock Ratings: 1 = buy at current stock prices, 2 = buy on a 5-10% dip in stock price, 3 = sell on a 5-10% increase in stock price, 4 = sell at current stock prices to raise cash.  Ratings are based upon 12-18 month outlook on stock direction and not necessarily related to moves I make due to financial positioning.

Today I sold 40% of my stake of On Semiconductor at a price of $15.90.  At the time of the sale, my position had gained over 87% in valuation and 42% of that increase has been since the first week in December.  While the stock did report spectacular results and a favorable guidance, I don't feel this strong of a move in just a couple months is likely to be sustainable.  As such, I needed to follow my own disciplines and take out some of my gains to protect me from down side risk.  I'm aware the stock technicals are still quite strong, indicating the stock could run more, but by taking out a large majority of what I've invested, I'm now close to playing with the house's money.  I see another 6.5% of room before the stock really feels like it's getting ahead of estimates and analyst price targets.  The stock is also known for pulling back as we enter into the spring months, since the reporting is now done and we're in a seasonally slow period.  This allows me the freedom to let the stock run on its own and take out the remaining investment as appropriate, or I can let it pull back and buy in at a much better time/price.  I still believe in the stock's long-term abilities to be a strong supplier for auto, IoT, and other power management solutions.  I just don't believe the stock and the company are in alignment at this time.  Discipline trumps conviction so I had to follow my rules.

Nothing on this site should be taken as advice, research, or an invitation to buy or sell any securities.  All views expressed are solely of my own and I am not a professional money manager.  Please consult with your financial adviser before taking any action in your own portfolio.