Yesterday, I sold my holdings in JD Sports and Cupid, and used the funds to buy a position in Pulsion Medical.  Explaining these one by one:

JD Sports: Although it has the potential to move higher, I don't feel that this is a stock I would be comfortable holding for the long term.  On a relative basis it may be cheap, especially when compared to stratospheric Sports Direct.  However, I haven't seen any sign that it's a high quality business, with competitive advantages.  I took the opportunity when I was in Nottingham a few weeks ago to look round a shop, and was disappointed that there were at least three others in close proximity selling exactly the same sort of product.  I then went to a Milletts and was shocked at the shabby nature of the store, and how empty it was.  Is this really a business I want to own for any period of time?  Their fashion business appears to be deteriorating, and while management may be doing the best I can, and it's not really a risk I want to own.  I'm happy to take profit.

Cupid: When I bought it, I thought I was buying a profitable business, and a future pile of cash.  When the recent results came out, it was clear that when Cupid sold the "adult" business, it kept the entire cost base and let most of the revenues go, leaving me with the hope of a profitable business at some point in the future.  So the facts had changed, and while I hate turning over stocks in my portfolio, I had a chance to get out with a minimal loss and took it.

But regardless of the reasons outlined above, the fact is that I think I found something better.  Pulsion Medical seems to tick all the boxes for a strong long term investment: A strong business model, where it sells medical instruments used at critical times, in a globally growing market, where sales are perhaps temporarily depressed by the economic issues in South Europe.  The number of industry players is pretty small at 4, margins are ROCE are extremely good and getting better.  The annual report is extremely impressive - the management cite Warren Buffett and are extremely aware of the shareholder and shareholder returns - they explicitly commit to buying back stock when it is undervalued.  Trading at 11* forward earnings, this is an absolute bargain, both on an absolute and relative basis and I hope to own this stock for many years.