Friday, November 2, 2012

Recent Buy

Let's start November off right with a purchase after I made 7 in October.  I decided to go on and take the chance to average down a bit in my Walgreens (WAG) position.  I initiated the position back in August by purchasing 35 shares and today I picked up another 32 shares for $35.06 each in my FI portfolio.  I now own a total of 67.275 shares of WAG since I'm currently reinvesting dividends in most of my positions.  Now that my expected forward dividends are starting to be a significant amount, I will probably be turning off the DRIP soon and selectively reinvesting the dividends into the best opportunities that I see at the time.  The Walgreen's purchase gives me semi-related exposure to the healthcare industry.  I need to add more to that portion of my portfolio since PFE is the only stock that is a pure-play health care company.

The new shares will add an extra $35.20 per year in dividends before any future dividend increases or reinvestment.  I'll also be receiving their next dividend payout in December, $8.80 for these shares, since the upcoming ex-div date is on November 7.  The 32 shares have a YOC of 3.12% and increased my WAG position YOC from 3.05% to 3.08%.  My forward 12-month dividends for my FI portfolio now sits at $1,345.36.

Since I purchased these shares for lower than the original purchase, I was able to lower my cost basis per share for the entire position.  My cost basis after the first purchase was $36.07 and now with the new shares the cost basis sits at $35.71 or 1.00% lower than before.  It's always nice to get a chance to lower your average share price in a company that will be able to continue it's DG for a long time to come.

8 comments:

  1. Nice purchase. I don't own WAG, but I have watched it for quite a while. I actually haven't purchased any healthcare stocks this year, so I might be looking to make an investment in that area in 2013.

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    1. DGM,

      Yeah WAG is a play on healthcare and I need to get some more exposure to healthcare. Earlier this year I was worried about how Obamacare was going to affect different companies related to the healthcare system and unfortunately missed out on some opportunities to pick up some shares of JNJ, ABT, BDX and MDT. I know at some point they'll come back to prices that offer better value so I'll just wait for now.

      Thanks for stopping by!

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  2. Nice buy. I picked up some WAG at a good price when they were having issues with Express Scripts. They are on my watch list to add more in the future as I really like the company. It's always nice to average down.

    I recently turned off the DRIP on my investments as well and I believe selectively reinvesting the money is the way to go. For example, just today I received enough money from my VZ dividend that it allowed me to purchase an additional share of a stock that I bought today. I will be posting that trade tomorrow.

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    1. Hmm...interesting another purchase. I'm curious to see which company you decided on.

      When my portfolio was only going to spinoff about $450 per year in dividends I figured it wasn't worth it too much to try and save it up. Now that I'm able to invest a good chunk of money each month it'll be easier to add the dividends to my capital and pick up extra shares like you got to do today. I still think I might continue to DRIP some companies but for the most part it's about to all be turned off.

      I wish I had been able to pick some WAG up in July when the ExpressScripts issues were on-going but I just never got around to it. Picking them up below $30 would have been nice since a $29.50 price gave a 3.70% YOC with a very rapidly growing dividend.

      Thanks for stopping by!

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  3. Great buy. I hope management integrates Boots without a hitch. It that happens, watch dividends increase at double diget rates! It's a wonderful long-term investment.

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    1. I hope so too. I still expect them to be able to grow them at the low double dgit rate for a while. Not sure if we'll continue to see the 20%+ but if the integration goes smoothly we could see it sooner rather than later.

      Thanks for stopping by!

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  4. PIP,

    I've looked at WAG a few times before and decided to pass up. I'm a bit concerned about competition in this field, as you rarely see a Walgreens without a CVS across the street. Also, the Express Scripts fiasco may have long-term issues.

    On the other hand, it does have pretty strong fundamentals. I'm a bit mixed on this one.

    Thoughts?

    Best wishes!

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    1. DM,

      I've got a stock analysis report for them posting tomorrow. I still think long term theyll be good. The prescription drug business will only continue to grow as more and more baby boomers age. I really wish I had gotten in when they dipped below $30 earlier this year. It would have made a michael better investment. But its still attractive at today's prices.

      Thanks for stopping by!

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