Well, I wrote an article 6 month or so ago about my position in Crius Energy Trust and my investing thesis for this particular stock. If you have not read that article you can do so here Crius Energy Trust
To summarize I took a position in Crius because I thought it was undervalued by a significant margin when I took up a position. If I recall the P/E was less than 4 and historical P/E average around 8-9. The stock had been hit by a short seller article and this caused a rush of selling for no legitimate reason in my opinion. all of this along with the attractive dividend yield I invested.
What a ride With KWH Stock!
Well about a week after I took my position back in August 2018 the earnings report came out for that quarter and the stock price had a nice little bump in the range of 20%, but I decided to hold and the price slowly declined. shortly before the next quarterly earnings report the stock rose by close to 30% and again I thought I will hold and see what the earning report brings. Well the earnings were not good and the stock dove down to $4 range and I was not underwater about 30%. Needless to say I began to doubt my decision to not sell the past 2 times the stock was up over 20%. I could have sold and bought back in both times and made a nice profit, but hindsight is always 20/20. So here I was sitting waiting and hoping the stock would recover and it was slowly creeping back up to a near breakeven point when the announcement came that the company was being bought for a price of $7.57 per share.
It Pays to be Patient
It pays to be patient and trust in your original investment thesis and that is ultimately what I did. Don’t get me wrong there were times when I doubted my decision, but ultimately my research before investing is what I always went back to and leaned on when I doubted my self. I knew that the stock was undervalued and in time would have to normalize and in this case, because it was so undervalued it must have looked like an appealing take over candidate and in the end this resulted in a 40% profit for my portfolio.
What Did I learn As A New Investor?
I am a strong believer in self-reflection in life, and I do this in my investing journey to check myself and learn from my wins and loses. So the question is what did I learn from my journey with Crius Energy Trust stock? Well, I learned that the pre-investment research that you do is what is going to provide you comfort in tough times, like if the stock price tumbles or things unravel not quite as you planned. if your research and investment thesis is solid and sound, then you can reassure yourself and hold your position. I also learned that I want to start running through different scenarios as part of my pre-investment research. So, for example, what will I do if the price goes up by a certain amount and what will I do if it goes down by a certain amount. Will I buy more, sell or hold. If I run through multiple different price scenarios before they happen then I won’t be caught off guard and will have a game plan for each eventuality and can execute my plan with confidence and take the emotion out of the equation.
This is not financial advice and all financial investments carry risks. Investors should seek financial advice from professionals before making any investment. I wrote this article myself and it expresses my opinions. I have no business agreement with any company mentioned in this article.