Sale of Select Comfort
I haven’t even gotten to my analysis of Select Comfort, but I sold all the shares in the Two Roads Diverged portfolio last Friday. If earnings stay where they are, this stock may turn out to be a good value at today’s prices. However, I have my doubts that the company can hold the line on sales as they have been deteriorating all year.
Select Comfort has turned out to be more of a cyclical company than I originally thought or that their management is willing to admit. As the housing crisis continues, I can’t imagine that a lot of consumers will be spending money on luxury beds.
Looking back, my analysis was pretty superficial on this company prior to purchasing. This analysis is equally superficial, but I can think of little reason to hold this company now. In the future, my sell analysis will match my initial analysis. For now, though, time is an issue. A loss for tax purposes looks like a pretty good reason to sell right now prior to digging much deeper. Hopefully a more disciplined and well-documented approach will diminish losses of this magnitude in the future.
