Within a couple of months, at least four analysts had upgraded the stock to an aggressive buy and the share price was soaring. Obviously tax considerations play a big part in the decision. In a taxable account, by contrast, it may be worth sticking with a successful stock even if it isn't as compelling as it once was. Holding on to a stock that has appreciated is easier if it's a growth company. This goes to the heart of the distinction between growth and value investing.
Value investors rely on exactly the opposite approach.
But unlike growth stocks, value investments generally come with a built-in sell signal. Sometimes, however, a value pick makes a successful transition to being a growth investment. AlliedSignal looks like such a case. But the share price is up nearly twice as much. And the outlook for earnings has been steadily improving, in part because of a proposed merger with Honeywell that should be completed this fall.