Active investors can use various types of conditional orders to integrate exit points and an exit strategy into their securities investments. Investors in private companies will also typically have an exit strategy plan when investing large amounts of capital. Active Trading Strategies In securities trading, exit points can be used to manage the risk of loss and also to set profit targets.
Since that time, the stock has increased nearly by a factor of two, resulting in current pricing not representing the same value as it did last September. Investors with other investing styles may well feel comfortable remaining in this name, as prospects for the company do appear to be improving.
Generating significant cash flow, even if they were battling in the midst of the "Retail Armageddon"; and b. Many more investors now recognize the capabilities and strengths of the company than they did just 9 months ago, but the price now reflects that recognition and has taken it out of "deep value" territory as I view it.
Many other investing styles may feel comfortable holding the stock going forward, as the prospects for the company do appear to be improving. The latest balance sheet, issued for the first-quarter earnings report on May 5th,shows improvement relative to last year: However, market valuation is now over two times the newer, higher book value, versus a 1.
With a more positive view of the name, its market valuation has improved commensurately, taking it out of a range in which a value investor would buy it.
The discipline of value investing is that holding a name at the close is the same as buying it during the day; as I would not be buying this name at this price even if I continue to view it as a well-managed enterpriseit is time for me to exit.
In addition, at these much higher valuations, I feel less comfortable owning it than I did nine months ago. Others may feel perfectly comfortable in this name. In addition, online retailing by the company the North Star program appears to be gaining traction.
Growth, growth at a reasonable price GARPmomentum and technically oriented investors may all well feel comfortable staying in this name. However, I do not, and I recommend an exit due to the higher valuations. Three Ways to Play the Exit a.
Those concerned about tax implications are three months from a long-term gain and can look to hold through the summer to the 1-year mark, then sell if prices remain near current levels. With implied volatility down across the board, one can consider buying puts on the name to secure a minimum gain, while retaining the option to share in price on movements higher.
It now appears that they will be worthless on expiration. I plan to close the position in early if the market price remains higher than the strike price rather than waiting for expiration. Of course, this will depend upon the implied volatility and pricing of the puts at the time.
I have believed, and continue to believe, that it is a quality company which is showing improvement in performance within a very competitive environment. Having overshot to the downside, it would not be surprising to see it overshoot to the upside as well. As a consequence, the market price and valuation of this name has moved out of a range in which I would be buying it or feel comfortable holding it.
As such, I am planning an exit when other factors make it optimal to do so. No guarantees or representations are made. The Owl is not a registered investment adviser and does not provide specific investment advice.
The information is for informational purposes only. You should always consult an investment adviser. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it other than from Seeking Alpha.Exit price represents the standpoint of sell-side: what a company would receive if it were to sell the asset in the marketplace or paid if it were to transfer the liability.
Fair value was previously viewed as an entry price. The impact upon me if the price is $39/share or $26/share at expiration is the same; whereas, if I owned the equity, then each $1 price drop is a lost $1 - so exit tactics do depend upon whether. Exit Price is the price at which an investor sells an investment.
The exit price is usually pre-decided to mitigate investment risk. The exit price is usually pre-decided to mitigate investment risk. k Views · . What is entry price and exit price in stock market? Update Cancel. ad by Toptal.
Exit Price is the price at which an investor sells an investment. The exit price is usually pre-decided to mitigate investment risk. k Views · View Upvoters.
MADHVENDRA, Trader & Investor. If you're not ready to place an actual order to plan your exit, at least consider setting a price trigger alert or making a note to document your strategy.
Planning your exit is one of the most critical parts of due diligence on an investment. use of any recipient. This publication may not be sold or resold for any fee, price Invest to Exit, I not only have a deeper under- strategy in each phase of investment, management and .