I recently decided to sell most (but not all) of the Fortescue Ltd (ASX: FMG) shares in my portfolio.
The ASX mining share held a sizeable position in my portfolio. As I regularly write about my investment moves, I think it appropriate to discuss any sales I've made, particularly if they go against any long-term views I've held.
I bought Fortescue shares a few years ago amid problems in the Chinese construction sector as Evergrande faced financial issues and caused panic around the iron ore price.
The Fortescue share price has risen significantly since then and paid huge dividends. I'm very happy with the returns I've made, but I decided to take most of my Fortescue money off the table for two main reasons.
The first and least important reason was to boost my house deposit fund, as I intend to buy a house this year. But why sell Fortescue shares now?
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Disappointing progress
I used the weakness in the iron ore price to invest at a good price but was attracted to the fact that I was gaining exposure to Fortescue's green energy efforts, including green hydrogen and green ammonia.
Fortescue recently announced it will offer redundancy to approximately 700 people across its global operations. And broker UBS notes that the Fortescue energy division is delaying its target of 15mt per annum by 2030.
The Phoenix and Gladstone projects remain in development, and projects in Brazil and Norway will continue to work towards a final investment decision (FID). However, UBS said a "considerable portion of the former >100 projects under consideration are delayed/deferred indefinitely".
The world does not seem to be pursuing green hydrogen to the same level as electric battery technology.
While Fortescue is working on green hydrogen haul trucks, it's also considering battery-powered trucks. BHP Group Ltd (ASX: BHP), Rio Tinto Ltd (ASX: RIO) and Caterpillar are also developing electric trucks. Airbus is developing electric planes.
The fact that Fortescue has abandoned its 2030 green hydrogen goal is disheartening and suggests a slowing of its green energy efforts. That may be the right call for the company as a whole, but it reduces the appeal of Fortescue shares to me.
I liked the company's move to sell electric vehicle battery intelligence software, but that doesn't seem enough to offset my main issue about the business.
Foolish takeaway
My main reason for buying Fortescue shares was weakened significantly earlier this month. So, I thought I'd sell most of my holdings, lock in some profits and boost my house deposit.
If the iron ore price crashed below US$100 per tonne, I'd be willing to buy more Fortescue shares in the future.
And if the company refocused back onto green energy, it could become more appealing to me (if it was trading at a good share price). But for now, I'll just wait and evaluate what happens next.
