Recent Sell/Buy (STX, SPAN)

21 Apr 2016 16:12
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Sold my entire position in Seagate Technologies (STX 100 shares at 25.99). Seagate’s available free cash flow has been eroding at an alarming rate and if things continue they are probably looking at a dividend cut in the 3rd or 4th quarter of 2016. This was too much risk for me to bear so I sold my position and walked away with a $600 capital gain and 5 years of dividends.

It has been awhile since I made a purchase so I took advantage of weakness in Span-America Medical Systems (SPAN) by grabbing 200 shares at $17. SPAN which recently traded at $19.50 dropped sharply after they announced losing a commercial customer Sinomax which represented 10% of sales but they also followed up with the announcement that they have a new commercial customer to backfill but that will not fill the void of lost sales until mid-2017. Granted the prospects for dividend growth this year are slim but I bought this on weakness with the expectation that I will see dividend growth in 2017.

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