3 Winning Stocks to Sell for Profits

NEW YORK (TheStreet) -- For whatever reason, many of us have trouble taking profits. You get into a stock, it runs and then some strange psychology stops you from selling out of fear of leaving money on the table.

Last week, I discussed how I was proud of myself for bailing out of Verizon ( VZ) ahead of earnings without concern I'd miss out on further upside.

Of course, you'll have some stocks that you literally hang onto forever, but I have learned that you really have to let some of the winners go, all the way or in part. If you don't, you risk eating away at some of your gains or, in the worst-case scenario, watching a winner turn into a loser in the blink of an eye.

While selling some VZ to instead go long, say, Microsoft ( MSFT) or Intel ( INTC) might not sound like a good idea today, it could turn out to make all sorts of sense six months or a year from now.

Sticking with that theme, Expedia ( EXPE) continues to rock it, turning in a largely solid earnings report after Thursday's close.

EXPE Chart EXPE data by YCharts

While I'm no longer long EXPE, way back in March of 2011 over at Seeking Alpha, I suggested hopping into the EXPE January 2013 $20 call options when they traded for about $5.00. The stock ended up nearly 15% at $52.39 in afterhours trading Thursday.

At some point, however, you've got to stop pressing your luck. Unless you've really done a ton of homework on the stock and consider it one you'll pass on to your great grandkids, taking profits makes a ton of sense.

It's even more difficult to unload a winner if you have a personal connection to it or there's a great story that accompanies the rise.

For many investors, Whole Foods Market ( WFM) could fit both bills, while Sprint ( S) represents a great story as a turnaround play.

WFM Chart WFM data by YCharts

Sadly, I own Nokia ( NOK), not Sprint.

If NOK even comes close to popping 70% in three months, I will sell at least a portion of my remaining shares in a heartbeat. It can be difficult to sell a stock that you perceive to be in the middle of a turnaround, but, remember, one quarter does not make a turnaround. And even if it does, it will not last forever, particularly in the competitive space Sprint runs in.

Just ask investors in the decade's top turnaround play to date, Domino's Pizza ( DPZ). Domino's really turned things around. Its shares have climbed by nearly 150% in the last two years. Although they have recovered a bit from their lows, they're off by about 8% in the last three months. Again, taking at least something off of the table probably represents the prudent choice.

While I'm on record as calling WFM the most perfect stock in an imperfect market, the same type of thinking applies here.

I have a personal connection to Whole Foods. The company has four locations within about one mile in either direction of my house. I can comfortably walk to two of them. I shop at two on a regular basis. I like the stores. I like the products. I like what they've done in many areas, particularly price and design.

Whole Foods runs a tight ship. It's an incredible operation. If I owned the stock, I might want it to be one of those that moves from generation to generation. But, one more time, perfection in front of Wall Street analysts and investors cannot last forever. Whole Foods' day to misstep and get torched will come.

When it does, it's not a sin to be in the stock and to buy more on weakness, but it will sure feel good if you realized some profits at or somewhere near the top. Because you really cannot time when the top is coming, it's best to trim positions when all seems right in the world, just as it's often smart to buy when a stock or the broad market is in chaos.

At the time of publication, the author was long INTC, MSFT and NOK.

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.

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