I apologize for not getting it all done on Friday, but this trade completes the rebalancing. We are selling the rest of the Industrial we trimmed. After their report last week, I was unable to raise my target, which suggests less than 20% upside over the next year after the big move Friday. We are also trimming another name which offers 36% and is moderately overbought. I continue to like this company's prospects, but the position is above average in size prior to the trade.
On the buy, the company we are adding is one that I actually added last week to CG/B. It gets us exposed to auto production somewhat as well as other end markets that are better than the name we are selling. It's somewhat of a value play, as the current valuation, including the massive cash position, is unsustainably low in my view. I don't have any reason to believe that they will be acquired by their parent imminently, but it sure seems like it would make sense. To my target, the buy would return 46%.
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