When to Sell
Deciding when to sell is just as important as analyzing purchase candidates. Here are suggested selling rules for value investors.
Target P/E Achieved
Your best sell signal is when earnings have recovered and the stock’s P/E is between the high and low estimates you used to calculate your target sell prices. If all went well, sales and earnings roughly tracked your targets, and the stock price is within your target range. You will be selling when analysts are increasing their earnings forecasts and growth investors are buying.
You Realize That Your Estimates Won’t Happen
Your biggest risk is that the company does not achieve your estimated sales and/or earnings goals. Your first clue will be when you realize that the company is ...
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