We must all suffer one of two things: the pain of discipline or the pain of regret or disappointment. – Jim Rohn
Be fearful when others are greedy. Be greedy when others are fearful. – Warren Buffett
- My initial position was in too small a size, about 0.05% of my portfolio.
- Momentum could carry it further.
I bought in November soon after the election when it became clear that infrastructure was going to be an actual priority. WLDN had been growing a lot and wasn’t expensive for the growth at the time. So I took a small position around $19/share and sold after last week’s earnings report at $33. The earnings results themselves were fine and the company sounded solid, but the multiples have blown up on this name.
My initial decision to research WLDN came from this write up. I didn’t know much about the company going in, but similar to my other small bets (VG, RSYS, TSL, and RDCM), my intention was to start small and add to the winners. This one got away from me, and at a TTM EBITDA of 20x, a Forward P/E of 25x and no defensible moat that I can see, I can’t justify holding on. I have to obey the iron law of valuation, even/especially when it’s tempting to say “but this time is different”. So I’ll choose the pain of discipline – look for other stocks with more attractive intrinsic valuations, and size my initial position appropriately.
In the short-term I think WLDN may go higher still, and if I had a larger position to begin with I could have trimmed rather than exiting. Lately I’ve been working harder to start every position with no less than a 3% position, which should help me to avoid having to bail from another runner like Willdan earlier than I would like.