Why I Sold Installux

In my earlier Installux post, I said I was on the fence about my Installux holdings and I would wait until annual earnings report before doing anything. Three weeks later I got cold feet and decided to dump all my shares.

My rationale was mainly the price support. The following chart shows that the current price is at a recent high. But I found that the company in 2020 bought back 5452 shares and the entire year's volume of trading was only 8534. Therefore, the company bought back 64% of the total shares traded in 2020! In 2019, the company began its buyback program with a cap of € 410. I just sold all at € 390 because I figured that's as high as it will get. There isn't enough support from the open market to ever go above the € 410 cap. As I have shown in an earlier post, the company's revenue and income numbers have shown mediocre growth in the last several years. And the stock price has justifiably never surpassed the 2017 high.

Installux was one of the first stocks I bought since writing this blog. In 8 years the stock has returned 14.5% including dividends. In USD, my functional currency, the stock has returned 13.5%. My gut says that's a resounding success. But after pondering about it for a while, I am a bit disturbed. If 13.5% is a resounding success, then I am expecting most of my other holdings to perform worse. What is average? Maybe 9-10%. What is bad? Less than 4%? Then by my admission, my methodology may only be able to get about 10% total returns. Now I have never disclosed my overall returns, because I simply don't know. But when I started this blog the back of my mind was saying I could do 12%. I am kind of disappointed that I clearly cannot.