Exited $USLM for 27.75% Total Return

On Oct 31 I sold USLM stock at $70/share. We have held this stock since May 10, 2012, originally purchased at $54.75/share. The total return from this investment was 27.75%, net of commissions and includes dividends received.

This is the original recommendation post I made to the members over 2 years ago

The stock today is a tad pricey. If you follow Buffett, you are advised to find a solid cash flow generating business that has a sustainable moat and hold on to it as long as the business maintains its moat. This is certainly the case with USLM to a large extent (new entry into the limestone mining business is expensive, and existing companies tend to keep their assets). For me, the stock had reached the price I had set as the target, and given the market valuations today, it is prudent to raise cash where possible to wait for new opportunities that should show up when the valuations correct.

I do like the business though as limestone is a key input to housing, infrastructure, oil wells, power, sanitation and many other industries. We have investments further upstream in the value chains so performance of this business is in a way an early indicator on what may be happening in the upstream industries in the coming months and year (“keeping your ear to the ground”).

At the time of the sale, USLM was about 7.3% of the portfolio. Currently the Value Stock Guide portfolio is about 20% in cash.

See the complete trade history of the Value Stock Guide portfolio

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