United Technologies (UTX) was one of our more recent additions to the Dividend Growth Strategy. It was the subject of our most recent dividend letter and we just sold it. Why?
We have a list of companies that we follow that we would like to own at the right price. But over the last year or so they were not trading at prices that interested us. Instead, we increased our efforts to find special situation investments. Investments with specific short-term catalysts that can unlock value. United Technologies met these criteria and we saw an opportunity for the spun-off companies to become dividend stalwarts.
The world and the stock market has changed drastically since we made our investment in United Technologies. With the broad stock market sell-off a lot of those companies we’ve been following are now trading at prices we like.
We are using this opportunity to start buying these companies and to add to existing positions. Sometimes this means we need to sell other positions to free up capital to rotate into positions we like more. United Technologies falls into this category. We hate to sell into a panic but we will take the capital loss on United Technologies and offset gains taken earlier this year in taxable accounts.
Over the coming days and weeks, you may see us sell more positions to free up capital to invest in companies that we’ve been wanting to own for serval years. We may also initiate trades to free up capital to reinvest in our highest conviction ideas.