3 shares I’ve just sold in my Stocks and Shares ISA

When I make an investment in my Stocks and Shares ISA, I do so with a long-term horizon. That’s five years, or ideally much longer.

However, that doesn’t mean I blindly hold onto shares, come what may. I will exit a holding if my investment thesis is broken. Or I see better potential opportunities elsewhere.

With this in mind, here are three stocks I recently sold, and why.

A pleasant surprise

The first was British American Tobacco (LSE:BATS). I was surprised when I found myself attracted to this FTSE 100 dividend share early last year. I’d never owned a tobacco stock before, due to falling cigarette volumes.

However, the stock just looked ridiculously cheap to me. In April 2024, I wrote: “Weâre looking at a forwardÂ price-to-earningsÂ (P/E) of 6.4, with a forecast dividend yield of 10.1%… to me, this high-yield FTSE 100 dividend stock offers exceptional value.”

I’m glad I embraced the risk, as the stock has since returned nearly 80%. And that’s before the juicy dividends!

Obviously, a starting dividend yield of 10%’s fantastic. So why sell? The same risk as above really, which is that cigarette volumes are set to continue shrinking, while there’s evidence GLP-1 weight-loss drugs are helping reduce nicotine cravings.

Plus, with the forward P/E ratio near 12, I feel the stock’s now more fully valued. So I decided to bank the gains and invest elsewhere.

An odd decision?

Another stock I sold was Oddity Tech (NASDAQ:ODD). This is a beauty/wellness company that uses artificial intelligence (AI) to build digital-first brands, most notably Il Makiage (make-up) and SpoiledChild (personal care/supplements).

The company recently beat Q2 revenue and profit estimates. And it raised full-year revenue guidance to as much as $804m, from $790m-$798m previously.

CEO Oran HoltzmanÂ struck a bullish tone: “Our business is growing with high profitability, multiple engines, and long runways.”

Oddity is a disruptor in the massive beauty industry and still has a small $3.3bn market-cap. The stock’s done well since I started a small position last year, rising 37%.

Unfortunately, I’ve noticed that some customers have complained online that Oddityâs brands attract them with trial offers, before rolling them into auto-renewing subscriptions that are difficult to cancel. A short-seller report also mentioned this last year.

Now, the company disputes this, saying its subscriptions are optâin and easy to cancel. Be that as it may, I was finding it hard to build conviction with this issue lurking at the back of my mind.

So while accepting I may come to rue my decision if Oddity becomes the real deal, I decided to sell my shares.

The final stock was Toast, which operates an all-in-one cloud platform for payments and online ordering for restaurants. Unfortunately, a lot of US restaurants are suddenly reporting very weak sales.

Is this just temporary consumer spending pressures? GLP-1s again? Or both of these things? I have no idea, but I fear it may suddenly harm Toast’s growth trajectory, so I exited my position.

Cash at hand

Another reason for selling a handful of shares was that I wanted some dry powder. Markets are at record highs and a lot of valuations look stretched. If thereâs a sell-off this year, Iâll now have cash spare, ready to take advantage.

The post 3 shares I’ve just sold in my Stocks and Shares ISA appeared first on The Motley Fool UK.

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Ben McPoland has no position in any of the shares mentioned. The Motley Fool UK has recommended British American Tobacco P.l.c. and Toast. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.