LONDON -- One of Warren Buffett's famous investing sayings is "Be fearful when others are greedy and greedy only when others are fearful." 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'll 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.
A lot to like
At No. 2 in the latest "Top 10 Sells" is supermarket giant Tesco (LSE:TSCO) (NASDAQOTH:TSCDY). (Based on aggregate data from The Motley Fool ShareDealing Service.) At first glance, that seems puzzling. Anyone who bought Tesco this time last year is currently sitting on a gain of 17% -- that means Buffett, who bought around 480 million pounds' worth in mid-January 2012, is now up over 80 million pounds on that deal. And on a current price-to-earnings ratio of under 12 and a forward yield of almost 4%, Tesco might still seem an attractive proposition.
But all has not been well at the supermarket chain. Although it's hardly the only food brand to have been affected by the recent horse meat scandal, it was the first of the big-name supermarkets to be involved, which may well have tarnished its reputation more than its competitors, however unfair that may seem. It also can't help that Tesco was recently voted the worst supermarket in a Which? consumer satisfaction survey. There's a feeling that some of the magic that catapulted Tesco to the top of the supermarket charts seems to have disappeared. But has it gone for good?
The horse meat scandal, which has since been shown to be Europewide, should eventually blow over, as politicians, food regulators, and retailers address labelling issues. The decline in customer satisfaction is clearly a significant issue, but CEO Philip Clarke seems intent that Tesco will correct that. Indeed, he blamed some of Tesco's poor financial performance in 2012 on the company's decision "to forego some short-term profit to reinvest in the long-term health of the business, with a clear focus on improving the shopping trip for customers." Only time will tell if that will happen and restore Tesco's fortunes.
A high-quality income share
If you're a seller of Tesco, or just unconvinced of its current prospects, and are looking for an attractive high-yield share, then this particularly high-quality income opportunity might be for you.
Indeed, the company in question boasts a 5.7% dividend yield and impressed Fool analysts so much that they've named this share "The Motley Fool's Top Income Stock for 2013." This exclusive new report is completely free, but will available for a limited time only -- so click here to download your copy now.