LONDON -- One of Warren Buffett's famous investing sayings is "be fearful when others are greedy and greedy when others are fearful" -- or, in other words, sell when others are buying and buy when they're selling.
But we might expect Foolish investors to know that, and looking at what Fools have been selling recently might well provide us with some ideas for investments that are past their prime.
So, in this series of articles, we're going to look at what customers of The Motley Fool ShareDealing Service have been selling in the past week or so, and what might have made them decide to do so.
The share price of Marks & Spencer (LSE: MKS ) shot up 11% in the course of just a few days in the past fortnight, driven upwards by speculation of an 8 billion pound takeover bid lead by the state-owned Qatari Investment Authority. And a spot of quick profit-taking may have put the company in the No. 2 spot in the latest "Top 10 Sells" list.*
The former mainstay of the British high-street has been struggling in recent years, and its performance in the run-up to Christmas, over the final three months of 2012, was very disappointing. In a trading statement in early January it revealed that its like-for-like sales of clothing and general merchandise had dropped almost 4% and like-for-like food sales were flat (up just 0.3%), resulting in an overall fall in like-for-like sales of 1.8%.
On the brighter side, its multichannel sales -- that's online sales (including via mobile devices), home delivery, and collect-in-store -- grew by almost 11%, and international sales increased by just over 4%. With its Chinese website having been launched this year, the company is obviously hoping for even greater growth in the months and years to come.
Even after the recent spike in share price, Marks & Spencer's forward P/E of 12.2 remains well below the general retail sector average of almost 19. And its forecast yields of 4.3% for 2013 and 4.5% for 2014 should make it an attractive proposition for investors who like to get an above-average income from their shares.
But doing business on the high street has been tougher than ever in recent years, with no real end to the adverse U.K. market conditions in sight. Only recently the Centre for Retail Research forecast a "flat" 2013, and growth of less than 1.5% in 2014, with physical sales suffering as online business continues to expand. The difficult U.K. retail environment may well be why Marks & Spencer's chief executive Marc Bolland expressed the intent to "transform Marks & Spencer from a traditional U.K. retailer to an international multi-channel retailer" in the January trading statement.
How long that transformation will take -- indeed, whether it can be achieved at all -- only time will tell. So perhaps some shareholders felt that they should realize a quick return on the back of the takeover speculation, putting Marks & Spencer near the top of the "Sells" table.
A top-quality income share for 2013
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*Based on aggregate data from The Motley Fool ShareDealing Service.