Selling winners

When looking to raise cash to buy into a company I admire I often sell my winners as I don't like selling at a loss. But this goes against the wisdom of running with your winners and selling your losers.

BHP Billiton is the only stock in my mortgage portfolio that is still showing a profit! Therefore I was considering cashing in the gain to finance the purchase of Oracle shares. However having just scanned their most recent interim report I feel that rather than selling BLT I want more!

In the second half of 2008 BLT managed to increase its underlying profit by 25% and its cash flow by 75%! With a useful 4% dividend yield and on a very reasonable PE of 11 BLT has good prospects for steady share price growth, especially as oil prices recover and its petroleum projects start to come on line.

So Oracle with have to wait. This one is a keeper!

We have lift off

In the last couple of months something amazing happened. Some of my shares started to gain in value!

In fact it appears that after 18 months of haplessly buying small amounts of bank shares in the hope of getting in at the bottom I have finally managed it!

In February and March I bought some Barclays shares at an average price of 82p. These shares are now worth 280p a couple of months later! After months of banking pain a bit of banking pleasure!

It appears that the world is not about to end. And maybe some UK banks have a future.

So am I still buying Barclays? Yes - even though its PE ratio is approaching 5 - sky high for a bank these days!

So what companies are catching my eye these days?

Oracle looks like a great combination of growth and defense. Its database software is critical for IT solutions all over the world and is needed recession or not. It has a huge pile of cash, is buying back shares and is aiming to grow EPS at 20% at constant currency rates. All this on a PE of about 13? Gimme some now!

The only disadvantage is that being a defensive stock that has held up pretty well over the last year ORCL will not capture the full benefit of a market recovery. But I am an investor not a trader so that is a secondary consideration.

Happy investing!