This morning I added to my position in Norfolk Southern Co. (NSC) by purchasing 20 more shares at a price of $61.96 in my Roth IRA. Earlier this month NSC announced disappointing 3rd quarter results and the share price quickly sold off. It lost over 7% the day the earnings were released. With the addition of 20 more shares I doubled my position in NSC from my original purchase in late September.
I figured now was as good a time as ever to take the chance to average down in my position. I missed the lowest price that it's seen since the earnings announcement but I'm not going to complain about the opportunity that I got to take advantage of. My cost basis for the new shares is $62.36 which brought my average cost basis down from $65.54 to $63.95, a 2.43% decrease. The YOC for the position increased from 3.05% to 3.13% and for the Roth IRA portfolio the YOC increased from 2.94% to 2.99%. The additional 20 shares will add an extra $40.00 in annual dividends before reinvestment or further increases. Unfortunately I purchased the shares today, the ex-dividend date, since the markets were closed earlier this week and will not be receiving the next dividend payment in December.
I was tempted to use the rest of the cash available to purchase NSC but just couldn't devote that large a percentage of my overall portfolio to NSC alone. I have enough cash left over to make a small purchase or use to try and average down in another position between now and the rest of the year. Either that or I'll be saving it up until I can start contributing again in the new year.
The forward 12-month dividends for my Roth IRA portfolio is now up to $180.08.