I'm not a very active stock trader, but my portfolio started to feel outdated recently. It was high time to collect profits from some longtime holdings, and to give up on a couple of unsuccessful ideas.
So I ran a late spring cleaning in my individual retirement account (IRA), closing out five stock holdings in their entirety and selling more than half of my shares in two other names. I tell you this not to necessarily mimic my actions, but more to perhaps learn something from them. Your mileage may vary, and I highly recommend doing your own research before taking any action in the stock market.
But for what it's worth, let me walk you through the decisions I made, one by one, starting with the partial sales.
NYSE: AMT
Key Data Points
American Tower: Sold 78% of my shares for a 50% return
Cell tower manager American Tower (AMT +0.82%) caught my eye in the fall of 2014. Back then, 4G wireless networks were new and hot, the company's international growth story was exciting, and the recently implemented real estate investment trust (REIT) structure brought promises of generous dividend payouts. At the same time, American Tower's reliable contracts generated rising revenues come rain or shine. Who wouldn't love a growth-hungry stock in the booming telecom sector, seemingly immune to economic downturns?
That thesis still sounds great on paper, but the real-world story is not so thrilling. The total return on my original investment (in two tranches) stopped at almost exactly 50% in a 10-year period. That's with reinvested dividends from the get-go. Over the same span, the S&P 500 market index notched a total return of 240%.
I'm not giving up on American Tower right now. I'm just pocketing some profits in order to reinvest the cash in another long-term dividend master. If that means shoveling more cash into my Vanguard S&P 500 ETF (VOO 0.07%) position with a 1.3% dividend yield, that's fine by me. Every diversified portfolio needs a robust foundation and the Vanguard fund serves that purpose to perfection. And I'm keeping a small American Tower stake, just in case the 6G wireless network generation delivers the tower profits its predecessors couldn't muster.
Criteo: Sold 67% of my shares for a 322% return
My portfolio has heavy exposure to digital advertising specialists. I lowered that rewarding but risky imbalance by selling off two-thirds of my Criteo (CRTO +0.00%) shares at a juicy profit.
This position started in March 2020, a few days before the absolute bottom of the early COVID-19 market crash. The France-based digital ad campaigns manager was debt-free and flush with cash, and more than prepared to ride out a lengthy coronavirus pandemic. Criteo's stock had fallen 66% over the prior year when I made my move.
Criteo's rebound didn't work out exactly as I had hoped. The online advertising sector as a whole took a deep dive in the inflation crisis of 2022, since ad buyers would rather hold on to their marketing budgets than try to convince an unusually price-sensitive consumer market. Despite lower top-line sales, Criteo never stopped pocketing free cash flows in this downturn.
This stock has more than quadrupled since I bought it, so my portfolio still holds a larger Criteo investment after a 67% sale than it did in the spring of 2020. These proceeds should go toward another thrilling growth stock, preferably outside the digital advertising industry.
NASDAQ: WDC
Key Data Points
Western Digital: Sold all shares for an 87% return
The rest of this list will address the stocks I'm completely done with -- for now, at least. They are presented here in the order of their effective return, from most to least profitable. The rundowns will be shorter and quicker since I no longer have investments in these stocks.
The first name on this list is data storage veteran Western Digital (WDC 0.83%). The maker of hard drives, solid-state drives (SSDs), and cloud storage solutions gave me an 87% total return on my investment, going back to June 2016. The stock looked undervalued at the time, hampered by a downturn in the storage industry but armed with the recent acquisition of SanDisk's SSD expertise.
Western Digital nearly doubled my money, but it took 8 years and the broader stock market ran miles ahead. The company no longer holds a unique advantage in the SSD market, as any digital storage expert worth its salt offers a large portfolio of SSD devices. My thesis on this stock arguably played out long before I considered selling those shares.
Autodesk: Sold all shares for a 12% return
Next up is Autodesk (ADSK +0.41%), an experienced giant in the digital design and content-creation software markets. It's the shortest holding period on this list, starting just two years ago on the notion that the Metaverse would become a game-changing business opportunity in short order.
Maybe I'm jumping the gun here, but the metaverse trend from a couple of years ago is going nowhere in a hurry. Meta Platforms CEO Mark Zuckerberg is still excited about this virtual world, but what else would you expect after renaming Facebook after this all-in market bet?
That's alright. If the Metaverse ever takes off, I'll have exposure to that opportunity through several other stocks and cryptocurrencies. I'll check up on Autodesk every now and then, but those reviews will be from Wall Street's sidelines for a while.
NASDAQ: MDB
Key Data Points
MongoDB: Sold all shares for a 9% return
If you're still with me, I made a minimal profit on next-gen database expert MongoDB (MDB +0.95%) in four years. This was another opportunistic grab in the COVID-19 crash, and I've lost patience with this erratic stock.
MongoDB's stock has drifted sideways for years while the roster of credible rivals kept growing. Even database traditionalist Oracle sells non-relation databases in the cloud these days. This company's technical leadership is falling apart. I'm happy to get my original investment back, ready for a new home in a fresher high-growth opportunity.
Nokia: Sold all shares for a 3% return
Everything I said about American Tower applies to Nokia (NOK +5.62%) as well. Furthermore, the Finnish telecom equipment and services veteran faces regulatory challenges in China and other key markets. Sure, the company is designing high-speed data networks for the moon, but that won't be a game-changing revenue stream for decades to come.
So I'll step away from Nokia for now. Wake me up if the company ever gets on friendly terms with governments and regulators in Beijing.
Edgio: Sold all shares for a 92% loss
Last and least, I lost almost everything in my Edgio investment. Formerly known as Limelight Networks, the edge computing and content delivery network operator once looked like a misunderstood and undervalued growth story.
Well, I was wrong about Edgio. The company has been burning cash for years, despite a supposedly game-changing merger with Yahoo!'s Edgecast content delivery network. Sales are up, profits are down, the stock is nearly worthless, and I'm done with Edgio. I'm left with just 8.2% of my original investment in this case, so it's good that I made this fairly speculative investment a small one.
Is it time for a portfolio review?
That's my stock portfolio's delayed spring cleaning, for better or for worse. I hope you learned something useful, or that you at least got a chuckle over my worst mistakes.
What about you? Have you done any portfolio cleaning lately? It's always a good idea to check if your investments are performing as expected and still fit your financial strategy. Whether you're making big moves or just a few tweaks, a tidy portfolio can make for a happier investor. And maybe you'll catch your own weak spots much earlier than I did here.
