Should I sell this position?

[jzpiano]

I own a couple hundred shares of EXC. I acquired it a while back in Jan of 2004 when it was $33 a share, since then it has had a 2:1 split (at $61 a share) and the current share price is just over $73. I sold about 1/5-1/4 of my position back in last June so I've already gotten back about half of my investment.

I'm going to graduate school next fall and it will cost about 20k to finish my masters. Currently I could sell the rest of this stock and have school paid for. Or I was thinking that I could take out bank loans (can I do that?) and keep my position until I have to start paying back the loans ~2 years.

Our household income during this time (with me not working) will not be able to cover school + living expenses so paying monthly isn't an option and I doubt with this type of investment that I will get any type of student loans. Which is why I was thinking that I should either sell the stock and pay for school completely or take out as many loans as possible and keep as much of the stock for as long as possible.

Sorry if I ramble....I'm very confused [img]/images/graemlins/confused.gif[/img]

[Stake Monster]

I am not an expert in investing but if the stock has gained so much and you will probably need the money soon, why not sell it while you're way ahead on your initial investment? You can then pat yourself on the back knowing you made a great deal. Why risk a sudden fall?

[jzpiano]

[ QUOTE ]
I am not an expert in investing but if the stock has gained so much and you will probably need the money soon, why not sell it while you're way ahead on your initial investment? You can then pat yourself on the back knowing you made a great deal. Why risk a sudden fall?

[/ QUOTE ]

That's true and that's part of the reason that I'm leaning towards sell, but then again I'm having a hard time justifying the sell because they have done EXTREMELY well for the last 4 years + the dividends are great. I'm also wondering because they might have another split soon.

[TLC]

What will the split do for you?

[meditate89]

Personally I'd get rid of this ASAP just b/c it doesn't look like a very attractive investment @ current prices. You should still try to get gov't loans @ 4-5% to pay for grad school if you can though.

I dont know much about the company to be honest but
P/E is kind of high
growth aspects don't look great
high dividend/ payout rate also confirms they don't have a good/efficient use for the earnings...

"large" dividend isn't necessarily a good thing

[jzpiano]

[ QUOTE ]
Personally I'd get rid of this ASAP just b/c it doesn't look like a very attractive investment @ current prices. You should still try to get gov't loans @ 4-5% to pay for grad school if you can though.

I dont know much about the company to be honest but
P/E is kind of high
growth aspects don't look great
high dividend/ payout rate also confirms they don't have a good/efficient use for the earnings...

"large" dividend isn't necessarily a good thing

[/ QUOTE ]

This is the type of info I was looking for, I know very little about stocks and am unsure of when it would be best to sell.

So if I do sell, and manage to get the student loans what would be the best way to invest the 20k until I have to start paying the loans back?

[jzpiano]

[ QUOTE ]
What will the split do for you?

[/ QUOTE ]

more shares = more dividend payout

[PokerFox]

[ QUOTE ]
I'm going to graduate school next fall and it will cost about 20k to finish my masters. Currently I could sell the rest of this stock and have school paid for. Or I was thinking that I could take out bank loans (can I do that?) and keep my position until I have to start paying back the loans ~2 years.


[/ QUOTE ]

Spoken like someone who's never seen the stock market go down.

Do not take out loans and assume you will be able to use investment $$ to pay them off when they come down. Bad, bad idea. If you are insistent, at least sell and dump the $$ in an S&P Index Fund or something a little more stable. Even then, though..not completely safe if you're banking on using that money to pay off loans, but it's safer then leaving it all in one stock.

[jzpiano]

[ QUOTE ]
[ QUOTE ]
I'm going to graduate school next fall and it will cost about 20k to finish my masters. Currently I could sell the rest of this stock and have school paid for. Or I was thinking that I could take out bank loans (can I do that?) and keep my position until I have to start paying back the loans ~2 years.


[/ QUOTE ]

Spoken like someone who's never seen the stock market go down.

Do not take out loans and assume you will be able to use investment $$ to pay them off when they come down. Bad, bad idea. If you are insistent, at least sell and dump the $$ in an S&P Index Fund or something a little more stable. Even then, though..not completely safe if you're banking on using that money to pay off loans, but it's safer then leaving it all in one stock.

[/ QUOTE ]

Yeah, I'm young and naive sometimes...I think I'm going to take your guys advice and sell it off. I'll only take the loans if I can get them at less a 5% interest rate. I'll probably throw the $ into a savings account till I need it, unless I know for sure I won't need it for the 2 years then I like the idea of the S&P Index Fund or a CD.

[Big TR]

[ QUOTE ]
more shares = more dividend payout

[/ QUOTE ]

Ummm, I hope you are joking with this statement. The same dividend pie is being passed out, but instead of getting 1 piece, you get 2 pieces that were half the size of your original piece. This will sound harsh, but if you truly thought that you will get a larger dividend payout after the split, sell this stock tomorrow. You have a lot to learn about investing and got reall lucky with this one.

Anyway, I think you should sell. Student loans rates are at 6.8% now, mandated by recent law changes. I believe that being debt free is better than hoping the stock continues the upward trend.