Friday, December 28, 2012

Recent Buy

Since Target has dropped further from my purchase last week due to the overall weak holiday sales I decided that I should add to my position a little bit more and picked up 35 more shares to round out my position at 100 shares.  You can check out my previous 2 purchases here and here.  The latest shares were purchased for $58.71 per share which gives a 2.45% YOC.  I wasn't planning on making any more purchases this year and holding out until January, but the shares fell enough that I felt I should add to my position.  I've been torn on whether I should get my free capital invested quickly or not because the "fiscal cliff" will be a huge catalyst either up or down depending on the outcome.

I was able to average down my position in Target by another 1.43% which gives a overall cost basis of $60.57.  This price is a 0.13% discount to my average fair value calculation of $60.65.  Unfortunately this lowered my YOC for the whole FI portfolio down to 2.89% from 2.91% and my non-ESPP share YOC dropped to 3.22% from 3.25%.

My 10 year projected return is for a 159.74% return from price appreciation assuming the EPS grow at the rates used in my stock analysis and slapping a 11 PE ratio on that.  If the dividends can grow at the rate I used as well, then I'll get a further 45.96% return from the dividends.  This gives a total return of 205.69% which is annualized to 7.48%.

These shares will add an extra $50.40 in annual dividends bringing my forward 12-month dividends up to $1,723.85

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