There are different reasons for investors deciding to sell shares in some of their UK-listed holdings. It might be because the original long-term investing thesis has changed. Perhaps it’s due to seeing better value elsewhere.
Let’s find out why these five Fools parted ways with some of their investments.
Concurrent Technologies
What it does: Concurrent produces computer boards and other embedded systems for use in critical applications such as military equipment.
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By Roland Head. I bought shares in Concurrent Technologies (LSE: CNC) for my ISA in 2021 and 2022. I expected to hold them for years, but I sold my entire holding a few weeks ago.
Why? Although the company appears to be trading well, I think the story has changed since I invested.
When I bought the shares, Concurrent had a committed dividend policy and a cautious approach to growth.
Admittedly, the company was probably a bit sleepy. But I felt that newly arrived chief executive Miles Adcock was likely to fix these problems and improve performance.
What’s actually happened is that Dr Adcock has taken a more aggressive approach to growth than I expected. The dividend has been cut drastically to free up cash, and the company is expanding through acquisitions as well as organically.
I think this strategy may be successful, but it’s not what I signed up for. That’s why I sold these UK shares.
Roland Head does not own shares in Concurrent Technologies.
CVS Group
What it does: CVS Group operates around 500 veterinary surgeries across the UK, Ireland, Australia, the Netherlands.
By Royston Wild. The animal care market is booming as pet ownership steadily increases. It’s why I’ve been buying shares in UK-listed CVS Group (LSE:CVSG) in recent years.
However, I slashed my holdings in the company in early September and removed my ‘buy’ rating on the stock. This follows the Competition and Markets Authority’s (CMA) decision to probe the British veterinary services industry. CVS generates the lion’s share of profits from these shores.
The watchdog will look at issues like price transparency and whether practices adequately state if they are part of a wider group. In short, the probe could have large implications for CVS Group, a company which has steadily grown earnings through acquisitions.
It’s also possible that the CMA’s report due in 2024 could have little impact on the Alternative Investment Market (AIM) company’s investment case. Still, buying its shares at this moment requires a huge leap of faith from investors. I think there are safer ways to try and capitalise on the growing petcare market.
Royston Wild owns shares in CVS Group.
Rolls-Royce
What it does: Rolls-Royce is a British engineering giant focusing on civil aviation, power systems, and defence.
By Dr James Fox. I recently sold my shares in UK behemoth Rolls-Royce (LSE:RR.) as it was becoming clear to me that there were clearer value picks elsewhere on the FTSE 100.
But it wasn’t an easy decision. Rolls-Royce still looks like an attractive proposition when observing long-term forecasts, especially in civil aviation.
OEMs Boeing and Airbus see as many as 40,000 new aircraft being added to the global fleet internationally by 2042.
This represents a huge market for Rolls, assuming it can expand its offer for narrow-body aircraft – traditionally the company’s engines are used on wide-body craft.
However, there is something speculative about the recent surge. There remains plenty of unknowns as the company recovers from the impact of the pandemic, and some risks, including the impact of a global economic downturn on travel demand.
My weighted buying price for the stock was around 95p. So Rolls was good for me, but I believe the momentum is slowing.
James Fox does not own shares in Rolls-Royce.
Tritax Big Box REIT
What it does: Tritax Big Box REIT is a real estate investment trust that owns a portfolio of logistics warehouses.
By Edward Sheldon, CFA. Recently, I sold my holding in Tritax Big Box REIT (LSE: BBOX). I ended up selling the stock for around the same price as I bought it for. However, after dividends are factored in, I came away with positive returns.
Why did I sell? Well, the main reason was that I wanted to free up some cash to take advantage of other opportunities.
I still like Tritax Big Box a lot. It offers an attractive dividend yield, and in the long run, it should benefit from the growth of online shopping.
However, with interest rates now at a much higher level than they were a few years ago (when I bought the stock), the medium-term outlook for the property company has become a little more clouded, in my view.
As for where I reinvested the proceeds of my sale, I put the capital into Hargreaves Lansdown shares.
Compared to Tritax Big Box shares, they were trading at a lower valuation, with roughly the same dividend yield. And higher interest rates are a plus for Hargreaves, as they are creating more interest in the company’s Active Savings products.
Edward Sheldon owns shares in Hargreaves Lansdown
Yellow Cake
What it does: Yellow Cake is a fund that gives investors exposure to uranium oxide, a key component in nuclear energy.
By Mark Tovey. When I invested in Yellow Cake (LSE:YCA) in early 2022, I had expected to hold for five years.
I was bullish on the uranium price because of figures suggesting a looming supply squeeze. The roughly 440 nuclear reactors globally gobble up more uranium than is extracted by mines each year. At the same time, there are over 50 new reactors under construction worldwide.
My thesis was simple: the price of uranium would have to rise to bring more miners online.
Yellow Cake’s stock price started 2022 at 340p and peaked at 560p this year.
While many uranium bulls believe this is just the beginning of an epic moonshot, I’m not convinced. The uranium spot price has already hit my target of $75 per pound, a figure I’d seen reported as being sufficient to bring on enough supply to meet the growing demand.
Uranium prices could still rise due to slow supply growth, but having met my price target, I opted to exit.
Mark Tovey does not own shares in Yellow Cake.
