I sold some Mindray stocks (MR) last Friday and today, and I bought some Syngenta (SYT), the European agriculture company. I think it is a more reasonably valued stock (compared to my across street neighbour Monsanto), in this ag (soft commodity) boom. The thing I want to make sure is it does not bust very soon.
The reasons why I sold Mindray:
1) Before and after it announced the acquisition of DataScope patient monitor business, the stock price dropped quite a bit (note this is quite normal in acquisition);
2) The main goal of the acquisition is the US market. But the business cycle of healthcare in the US has peaked, from my observation;
3) An analyst from Credit Suisse lowered price target. He was saying the DataScope patient monitor business in the US is barely profitable. Also, quote the analyst, “The takeover is likely to lead to near-term margin contraction and integration risks for Mindray Medical, while benefiting the company over the long term, the analyst says. The EPS estimate for FY08 has been reduced by 26%.”
I don’t know where is 26% come from, but I agree with the analyst “short term negative; long term positive” view.
My stock holdings as of now:
CHL (China Mobile), GSIT, MR (Mindray), RIMM (Reseach in Motion), SYT (Syngenta)
Among them, only GSIT is a US company, which is also my smallest holdings and I plan to sell in the near future (hope to break even on this).