Sold LXP

08 Sep 2018 13:05
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Friday afternoon I sold off all of my shares in Lexington Realty Trust (LXP) and banked a 9% gain. I sold on the basis of lack of visibility where the company was going based on their recent sell-off of 21 properties and formation of a joint venture for said properties with a 20% stake. article link

Of course with a loss of properties their would be a reduction in earnings and in turn a reduction in the dividend payout. But this didn't bother me as much as it was unclear as to what the company was doing with the remaining proceeds after paying debt obligations. Initially I did not sell in the hopes that the company would have an additional press release to add more clarity to the transaction and future plans but as of Friday there was nothing.

One could argue that LXP has made it's vision clear more than a year ago by refocusing its strategy towards industrial properties and that this deal simply accelerates that shift. So should investors be surprised? I agree that LXP has communicated its strategy over the last two years and that this is not that big of a surprise. What bugs me is the lack of clarity into timelines, projected targets or even possible talent acquisition for managing & acquiring industrial properties. Summed up, I sold because of their lack of communication on details of future execution.

I have learned my lesson about holding stocks with uncertainty and speculation. If things become more clearer for the positive then I'll buy back in, if not I'll enjoy the 9% gain.

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