Selling, of course, is one of the harder things to do.

In the May 2012 MoneySaver we have two articles addressing this which may be helpful.

Generally, I have sold for the following reasons: (1) a decline in revenue NOT related to a broad economic sell-off (2) a sudden change in management (key word sudden); (3) a change in strategy  (4) an increase in debt levels (too much risk added); (5) stock dilution at ever-lower prices (this happens way more often than you might imagine); (6) 'promotional' press releases; (7) excessive valuation.

Briefly:

 1) Most companies should increase revenue constantly. If they can't, something is not working. Even inflation should allow for minor revenue gains in a weak economy. For a worldwide recession like 2008, however, we would cut some slack. But, generally, once sales start declining, you have a problem.

 (2) If management leaves suddenly, use caution. One executive taking a more senior job elsewhere is not a problem, but several executives leaving for 'personal reasons' is worrisome.

(3) Companies only change strategy is something is not working. It is risky, as it is like starting a new business. Immersive Media (now EMB) was a 360-degree camera company, which decided to go into coal development. I almost fell off my chair when they did that. The stock has a one-year return of negative 69% in their newer strategy.

(4) Debt is a killer. 5N Plus made a big acquisition last year. The raised $100 million; and debt is still higher than before. Now, their industry has turned, and they have a big problem now.

(5) Dilution: Guyana Gold just issued stock at $2.91. In 2010 they sold shares at $6.95; how can they treat shareholders like that? We look for companies that never dilute, but barring that, at least sell shares at more than they were before. Show that you can create value, not just raise money.

(6) Companies that are always issuing press releases should be treated with caution. Press releases are not free, you know. We have seen it all in the PR world. We once saw a press release that stated, "Equipment is now being delivered to our new plant". As if that was a material event. Not sure what shareholders expected to go into a new plant before that informative press release.

(7) Valuation. This is tougher, because great companies SHOULD be expensive. But if there is no justifiable reason for a company to get a higher valuation, it deserves a closer look as a possible sell.