Why Did I Sell Texas Roadhouse?

Tweet

The earnings report was yesterday, the 15th of February, and I held my shares with my own due diligence suggesting that TXRH would most likely at least meet analyst expectations and report good numbers. My shares were already up over 20% from my cost basis at the time of the call. My general rule is to sell a short term position at 15%, but the numbers were just too good. The stock rallied in after market and pre-market activity, and I strongly felt the open would continue the rally. It did. And big time. Five minutes ago, I sold all of my shares at a 34% gain with the stock rallying nearly $15 per share. It may still go higher in the day and even for the next couple of days. So, if the numbers are good and the earnings report was better than expected, with some very strong numbers to support more upside ahead for the company, why did I choose to sell my shares? It's simple. The stock will pull back after the excitement wears off. I lock in my profits and then determine where I think the next support level is for the shares, and I can buy back in and enjoy more upside with my profits locked in and with my new shares obtained at a discount to the rallied shares. TXRH may have been on my sell list. But it's one I am going to continue to watch and will very likely own again when the time is right. At the same time, I did buy more shares today of Realty Income (O) and Kraft Heinz (KHC) and intend to add more shares after the Walmart (WMT) 3 for 1 split later this month. These moves also allowed to me increase my dividend income on a smaller amount of invested cash than TXRH was providing.