Friday, August 31, 2012

Recent Buy

This afternoon I bought 40 shares of Harris Corporation (HRS) for $47.05 per share.  After commission my cost basis is $47.25 per share with a YOC of 3.13%.  I missed my limit order yesterday by $0.01 which is very annoying.  Luckily it wasn't a huge difference in YOC.  I'll be able to get their next dividend payment which goes ex-div next Wednesday.  These shares will add an extra $59.20 in annual dividends with an extra  $29.60 coming in this year before reinvestment.  I'm hoping that the market will sell off some next week prior to some big news out of Europe and that I can buy more into HRS before the ex-div.  My entry price is selling at a 14.35% discount to the average fair value that I calculated in my stock analysis on HRS.  I'll update my HRS stock analysis soon now that another fiscal year for them has passed.  The Harris purchase increased my overall YOC from 2.39% to 2.44% and my non-ESPP share YOC from 2.99% to 3.01%.

I'm a little annoyed because my brokerage wasn't counting my option premium income if I sold a put on Archer-Daniels Midland (ADM) like I wanted to.  My plan was to sell the December 22 2012 $26 put for $1.28.  This would have returned a 4.62% after commission which is a 14.91% annualized return.  And if the option was executed then my cost basis would be $24.88 which is a 2.81% YOC based off the current annual dividend of $0.70.  If it is still selling for this amount come next week I very well might be selling the put once my deposit clears at my brokerage.  This will help to lower my cost basis on my existing ADM shares.


  1. I welcome you as a fellow HRS shareholder. We both now have the same exact position size (or ownership %) with 40 shares. Good stuff!

    I would agree with your valuation. Just doing a real quick DDM valuation using a 12% discount and a 9% growth rate translates to fair price at just under $54. That's being pretty conservative. $55-$57 would probably be pretty close to intrinsic value based on this model.

    I made my first purchase in the mid-$30's but would be open to buying more here.

    Best wishes!

  2. It's undervalued as you know but I just wish I had gotten in at about the price you did. Your YOC should be approaching 4% right? It sure would be nice if it can have a 10% pullback to let me get some more in the low $40's, not sure if we'll be seeing mid-$30's again unfortunately.

    Thanks for stopping by!