Magna released its earnings report today and the stock tanked 8%. The report wasn’t bad at all, but the outlook is not as rosy as it used to be. Their bottom line will be impacted by US tariffs on metal, so I decided to sell my shares and wait for a better entry point.
I invested in Magna two years ago when the stock was trading at $54. Last month the stock was trading at $80 and I was thinking of getting out because of high valuations. When the stock dropped to $70 this morning, I decided to get out and lock my profit. My capital gain is 30% from two years of holding the stock. Had I sold the stock last month, my profit would have been much higher.
I think today’s drop is only the beginning. There’s more downside. The stock could easily drop another $10 from here. If the stock gets back under $60, I will be buying it again. But for now I will be watching it from the sidelines and will invest the money in something else.
Investment summary:
Bought 32 shares for $54 per share
Sold 32 shares for $70.50 per share
Return on investment 30% or $513
If you own Magna, let me know what you plan to do. Lock in profits or buy more?
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