Why Did I Sell 100% of My Skyworks Solutions Stock, and Buy Tesla, Cheesecake Factory, PayPal, Nike, and Alibaba?

TL;DR

The investor sold all 500 remaining shares of Skyworks Solutions because its outlook was weak, earnings had declined for several years, and recent results missed expectations. About $50,000 in proceeds was divided among Tesla, Cheesecake Factory, PayPal, Nike, and Alibaba, with nearly $20,000 allocated to one purchase. Read on for the complete reasoning behind the sale and reinvestment choices.

Transcript

well folks I made a very difficult decision here today and I did decide to sell out of a stock completely I sold all of my shares 100% of my stake in the company I was about $50,000 in proceeds from the stock and uh so we're going to go ahead we're going to go through what stock I sold why I decided to make this decision it was a tough decision non... Read More

Key Insights

• 🍉 Selling a profitable stock like Skyworks Solutions can be a difficult decision, especially when it has long-term potential and offers dividends.
• 📈 Earnings trends are crucial to monitor for stocks, and declining earnings over multiple years can indicate problems.
• 🙈 Tesla and PayPal are seen as long-term investment opportunities, while Cheesecake Factory's F FRC Concepts and Nike's cost-cutting measures provide growth potential.

Questions & Answers

Q: Why did the investor sell all of his Skyworks Solutions stock?

Skyworks reported a weak outlook while its earnings had continued declining for several years. The investor also noted recent misses in earnings and revenue, with no convincing evidence of game-changing chips or new growth areas.

Q: How much Skyworks Solutions stock did the investor sell?

He sold his remaining 500 shares, representing 100% of his stake in Skyworks Solutions. The sale generated about $50,000 in proceeds.

Q: Why was selling Skyworks Solutions a difficult decision?

The stock had made money for the investor, could potentially make money again, and paid a dividend. He also regarded Skyworks as a good company with a good balance sheet, income statement, products, and services.

Q: What problems did Skyworks Solutions face beyond Apple and the iPhone?

Skyworks said smartphone demand had stabilized, but it expected other sectors to remain weak. This meant weakness was not confined to Apple and the iPhone business.

Q: What earnings trend concerned the investor about Skyworks Solutions?

The investor said earnings had fallen for several years and had not turned around. He expected the company could record three straight years of declining earnings.

Q: What recent results had Skyworks Solutions missed?

The investor said Skyworks missed EPS expectations in the first and second quarters of 2023. He also cited revenue misses in the second and third quarters of 2023.

Q: Which five stocks did the investor buy with the sale proceeds?

He divided the proceeds among Tesla, Cheesecake Factory, PayPal, Nike, and Alibaba. One of those purchases was nearly $20,000.

Q: Why did the investor think Skyworks Solutions might be a value trap?

He had repeatedly waited for the business to turn around, but earnings continued declining and the latest outlook remained weak. Interviews and the latest conference call did not provide confirmation of game-changing products or new growth areas.

Summary & Key Takeaways

• Who: The investor sold his entire remaining position in Skyworks Solutions.

• Number: He sold 500 shares, equal to 100% of his stake.

• Number: The sale produced about $50,000 in proceeds.

• Step 1: Sell Skyworks after several years of declining earnings and a weak outlook.

• Step 2: Divide the proceeds among five stocks.

• Step 3: Buy Tesla, Cheesecake Factory, PayPal, Nike, and Alibaba.

• Number: One of the five stock purchases was nearly $20,000.

• Compare: Skyworks remained a good company and dividend payer, but its earnings trend and recent misses were troubling.

• When: Skyworks missed EPS in the first and second quarters of 2023.

• When: Skyworks missed revenue in the second and third quarters of 2023.

• Definition: The investor viewed a value trap as a stock expected to recover that repeatedly fails to turn around.