Thursday, December 20, 2012

Recent Buy

After adding to my Target position, I also initiated a new position in Phillip Morris (PM) this morning by picking up 25 shares at $84.43 each.  If I was able to be near my computer at the open this morning I would have been able to get the shares a little cheaper but I had to run in to the office to finish up some paperwork so I had to set the limit order and hope it hit without dropping too much further through my price.  I've had my eye on Phillip Morris for most of the year but didn't have the capital available when the price got down to this level.  Luckily, this time around I had some cash ready to deploy and got the chance to start a position with them.

These 25 shares will add $85 in annual dividends before further increases or reinvestment and carry a YOC of 4.01% based on the current annual payout of $3.40 per share.  Since the ex-div date for their next payout is 12/24 I will be receiving the payout.  Unfortunately it's not being paid this year but it will add to my January payouts which is good because it'll help to diversify my payouts more.  Prior to my purchase of Medtronic earlier this month, I only had one company paying out on the Jan, Apr, Jul, Oct schedule and now I'm up to 3.  My position in PM increased the YOC for my portfolio from 2.87% to 2.91% and my non-ESPP shares YOC from 3.22% to 3.25%.

I'm now out of capital for the next few days until I can get money transferred back into my brokerage account.  Luckily it'll be a slow week next week with the Christmas holidays so I won't be missing out on too many days with the markets open.

My forward 12-month dividends now sit at $1,672.37.

14 comments:

  1. Great purchase of PM at under $85. It is on my short list of purchases. I really like it at this price.

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    1. Chad,

      Thanks. I missed it the last time it dropped down to these levels so I'm glad that I finally got to pick some up. Sub $85 is a solid price. Hopefully you can get some to ascend we can be co-owners.

      Thanks for stopping by!

      Delete
  2. Pursuit,

    Nice move here. I really like PM at these levels. The talk of regulation in the EU, similar to what they're doing in Australia, has really bounced this thing around. Asia will be the growth engine for the future, however.

    I think adding to my 80 shares is a prudent thing to do here.

    Best wishes!

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    1. DM,

      Looks like I might have been a day early on this purchase with the markets set for a big drop tomorrow morning. I'll have to hurry up and get some cash transferred over for next week. I really PM at these prices. Asia is definitely going to be the driver of growth going forward. I'll just keep collecting my dividends and waiting for a chance to add to my portfolio.

      Thanks for stopping by!

      Delete
    2. Hello Passive,
      I enjoy reading your blog. I was wondering how you were so certain that the markets were set for a big drop the day after you posted your comment. Are you looking at after hours trading of S&P futures? What exactly is your crystal ball in this case?

      Appreciate any insights you can provide.
      MG

      Delete
    3. You're correct. All I did was check the futures to and noticed the DJIA was set for about a 190 (1.5%) loss and the S&P was slotted for a 1.5% loss as well. Figured that it probably wouldn't turn around at least on the open. I wish I had a better crystal ball than that though.

      Thanks for stopping by!

      Delete
  3. I also fight with insufficient capital for buying, so currently I am trying a different approach - holding at least 30% cash in my account always ready for opportunities.

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    1. Martin,

      30% is a good chunk to keep on hand. I don't think I could sit on that much cash. Especially now with the markets more volatile. I wouldnt be surprised if in normal market conditions I end up hitting much higher cash percentages. Markets set for a big drop tomorrow morning and here I am without cash. Hopefully this is just the start of a bigger pullback.

      Thanks for stopping by!

      Delete
  4. Nice purchases of PM and TGT. I've noticed the recent price drops for both stocks (I already own PM; TGT is on my watch list). If PM were to drop further I would consider a small addition to my position, even though it's currently my 3rd largest holding. I am also entertaining the possibility of initiating a position in TGT, especially if it were to drop below $60.

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    1. DGM,

      If yesterday's action in the stock market is anything like what's about to come then I'll be adding to PM to try and lower my cost basis. I wanted a much larger position but didn't want to get it all in one go. Sub-$60 is a great price to get in on TGT. I'm hoping for a further pullback to the 2.50% yield level, $57.60, to add to my position again.

      Thanks for stopping by!

      Delete
  5. Outstanding choices. I'm a huge fan of Philip Morris. It's my largest position and I plan to keep it that way. PM has lots of room left to grow. Here in S. Korea most stores don't sell Marlboros, not to mention a pack costs about $2.45. I see room for increased market share and increased margins from raising the price. I'm not worried about packaging changes involving graphic pictures, but plain packaging could be a disaster. It's something to keep an eye on.

    I'll be investigating TGT. You guys seem to be fond of it and I respect your opinions.

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    1. CI,

      I just wish I had been able to buy some PM earlier to start getting the dividends rolling in. But I will be getting the next payout in January so that's good. The potential Europe packaging changes could hurt sales a bit, but I don't think it'll have too much effect. Asia will be the driver of growth for PM and I'm looking forward to receiving more dividend income from them every year.

      I really like TGT if you're looking at the retail sector. It's crazy to think that they are just starting to expand globally. Although it's refreshing to see a company not expand just for expansion's sake. Management has done it very methodically which is nice to see. Canada should be prove to be very profitable and help fuel the dividend growth going forward. Hopefully at mid-teen rate.

      Thanks for stopping by!

      Delete
  6. Great buy here. You got in a little cheaper than me but I will be adding more if it continues to drop. I will have to look at TGT. The yield is a little low but they have had nice growth. Take care.

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    1. AAI,

      Your post about purchasing PM brought it back into my attention. I had stopped checking what it was doing because it was too far out of my price range about a week ago. Thanks to you I noticed that it had fallen back into the $84 range so I was able to pick some up. Thanks for that.

      TGT's yield is low which is really the only thing I don't like about it but I expect to see an elevated DGR for several more years which will bring the YOC up.

      Thanks for stopping by!

      Delete