Tuesday, November 6, 2012

Recent Buy

This morning I set a limit order in my Roth IRA to pick up some more shares of Norfolk Southern Company.  I was able to purchase 11 more shares at a price of $60.96.  This was exactly $1.00 lower per share than my purchase last week.  My fair value price for NSC sits at $67.03, so I was able to pick up the shares at a 9.50% discount.  This pretty much exhausted my capital for my Roth IRA until I can add to it next year.  Our MAGI should be less than the limits for next year so we should be able to continue contributing to it.

The latest purchase brings my total share count of NSC to 51 shares.  The last ex-div date already passed so I won't be getting paid on these shares until next year.  This brings my YOC for the NSC position up from 3.12% to 3.14% and increases my forward dividends from $80 to $102.  This purchase lowered my cost basis on the position by 0.83% today $63.61 which is a 5.10% discount to my fair value calculation.

My forward 12-month dividends for the entire Roth IRA portfolio now sits at $202.08 with a YOC of 3.01%.

7 comments:

  1. What do you pay for commissions when trading in your Roth? My broker charges me $7.95. On a trade just under $700, a commission of that size means I'm already in the hole by over 1% for that lot. Which is not acceptable to me. I try to keep lots to $2500 to keep transaction costs minimal.

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    1. I pay the same, but I wanted to go on and get as much of the capital to work as I could. If I didn't make a purchase that money would have been sitting in the Roth earning the measly interest rate on the cash that I get until January when I can add more capital to it. I figured the price was right so I might as well get it working for me. Obviously it's not the ideal but I couldn't justify the money just sitting there earning something like 0.01%.

      Thanks for stopping by!

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    2. PIP,

      Nice purchase here. NSC is high on my list for a potential purchase in November. It's trading at a pretty heavy discount to my cost basis, and I'd love to average down on what I feel is a company that will be around for many more decades to come. I get my commission check on Thursday, so my shopping list is getting filled up quickly!

      Best wishes.

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    3. DM,

      I know what you mean about your shopping list getting filled up. I just wish I had more cash for all the stocks I'd like to add to. I picked up more shares to try and lower my cost basis like you're thinking of doing. If only I had more capital free to lower it more than I did, but my Roth IRA funds for 2012 are almost fully invested save for about $30.

      Thanks for stopping by!

      Delete
  2. Great buy here! I would probably add to my NSC position too if I didn't already own 100 shares (it's my largest holding). I'm already over-allocated, so I went with KMI instead.

    Still, congrats on getting it at such a low price!

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    1. FI,

      Thanks. I thought so too. But I'm probably done purchasing NSC for now as well. KMI might be the next addition if it continues to pullback.

      Thanks for stopping by!

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  3. Looks like I was a day early on this purchase. Ooops.

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