"We just focus on a few outstanding companies."
Warren Buffett 

At Tier 1 Investments, a Motley Fool Real-Money Portfolio, I seek out and invest in elite businesses. These include companies with the strongest competitive advantages, largest growth opportunities, and best management. I call these businesses Tier 1 enterprises, and when I invest in them, I typically plan to hold them for many years. Unfortunately, that will not always be the case.

Panera Bread (NASDAQ:PNRA) joined the Tier 1 portfolio back in February, and its stock price has risen about 10% since then. Not a terrible performance, but those returns have underperformed the S&P 500's 24% return since that time.

The main reason for my intended sale of Panera is that I want to allocate the majority of my investment capital to companies that dominate their industries -- such as Google, Amazon.com, and Starbucks -- and whose competitive advantages are growing stronger. With Panera, I've been growing increasingly concerned about competition, including an emerging threat from Starbucks, which, although not a direct competitor, will increasingly compete for consumers' dollars spent in the bakery/cafe space thanks to its acquisition of La Boulange.

Make no mistake -- I still believe Panera's investors will enjoy long-term gains from these levels. The company is likely still less than halfway toward reaching its ultimate store count potential, and Panera -- with its focus on quality ingredients -- should continue to benefit from the trend toward healthier eating. I also respect and admire co-founder and CEO Ron Shaich, and believe that he and his team will continue to position Panera for long-term success.

However, I've designed Tier 1 to be a highly focused portfolio, with my capital allocated to my very best ideas. So occasionally, as I identify new investment opportunities such as my upcoming purchase of LinkedIn, I will sell some of my current lower-conviction holdings. Panera will be my first sale in this regard.

The Foolish bottom line
At least 24 hours after this article is published -- standard operating procedure for The Motley Fool's Real-Money Stock Picks program that's designed to give Fools the opportunity to buy ahead of us should they so choose -- I will be selling Tier 1's shares of Panera Bread.

Next steps
If you're interested in hearing more about one of the companies that I will be buying in Tier 1, check out this free report, which explains why my chief technology officer is putting more than $100,000 of his own money into it. To access this valuable information, all you have to do is click here now.