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  5. TFII: I'd appreciate your thoughts on when to throw in the towel for stocks in taxable accounts. [TFI International Inc - Ordinary Shares]
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Investment Q&A

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Q: I'd appreciate your thoughts on when to throw in the towel for stocks in taxable accounts. When companies in my registered accounts plateau or backslide, it's an easy decision to move on. I find it much more challenging to sell previously profitable stocks in taxable accounts. By way of example, at one point, I was up some 150% with TFII. That has now slid to just over 100% and it appears it will be a while until this cyclical stock recovers. In instances such as this, do you advise patience...or taking the tax hit and moving onto a company that has a clearer growth profile going forward? Thank you.
Asked by Maureen on October 23, 2024
5i Research Answer:

We always find it difficult to 'leave' a long term winner and generally if it is not the company 'screwing up' and is just the market or the sector, we will not. Certainly TFII has some cyclicality. But it has also been one of the best compounders in Canada, despite this. Shares were under $3 in the late 2000 to 2010 period, and are up 60X+ since then. If we remove the financial crisis time period, they are still up more than six-fold since the last decade. A weak sector can give TFII more M&A activity, and it has benefited from other (weaker) companies going bankrupt in downturns. There may be other companies doing better in the short term, certainly. But if one takes a 25% to 34% tax hit then we would be more likely to keep the stock rather than move less (after tax) capital to another name that might not even work.