Selling Out of SMTC Corp.

Unfortunately, my thesis of improving growth prospects and higher end demand at SMTC Corporation (SMTX) appears to be incorrect and due to the high debt level at the firm I have decided to cut my losses and sell out of the position this morning.

As with any investor, I always hate to lose money on positions but my opinion is that one should constantly re-evaluate their positions as if they were looking at the company again for the very first time and to ask themselves would I buy this company today.

So, what went wrong? Simply, this is a small player in the semiconductor space and the company reported what appears to be a demand shortfall across multiple clients. In addition, the capitalization of the company has fallen to a level which for risk management purposes is too far below my stated minimums.

I plan to redeploy the cash in the next several days.