SELL: TVTX, GFL
After going through our portfolio this past weekend, I’ve decided to make a couple of quick changes. Part of my thinking with these two sells is that we have a new crop of ideas coming in next week’s issue and we can carve out some spots (and free up capital) for fresh ideas, while taking a little risk off the table while the market is strong.
Sell GFL Environmental (GFL). I updated you on GFL’s earnings report late last week, then I did more work on the name and have decided the near-term potential reward doesn’t justify the risk. I have heard some grumblings about the pace of GFL’s acquisitions and the potential for hiccups due to rising labor rates and all the integration work. I actually think the company will work through all this just fine, but then we entered this name as a short-term trade so (from that perspective) what happens in the coming weeks is arguably more important than what happens in mid-2022. Taking in all factors, I’ve decided to step aside from GFL at around our entry price. I’ll keep an eye on the name, as I like it, probably at a lower price. SELL
Sell Travere Therapeutics (TVTX). Along the same vein, we’re going to take a profit of around 25% on TVTX today. This is another trade opportunity we entered (in September) and the stock’s been on a one-way trip higher since. That said, there are some regulatory hurdles to get over in early-to-mid-2022 and those can always cause hiccups. We also see TVTX bumping up against overhead resistance in the 30 to 33 price area. Rather than let this trade turn into a longer-term investment and absorb all the regulatory risk that goes along with that, let’s just work our plan and take the nice gain right now. SELL