Thursday, May 9, 2013

Recent Buy

I'm reporting a purchase from Tuesday, May 7th where I picked up 40 shares of Microsoft (MSFT).  I was actually heading to my brokerage account to try and cancel the order because I felt I was being a bit hasty in the purchase but by the time I had logged in the purchase had gone through.  I'm still happy with the purchase although I think I could have picked up the shares for less.  Microsoft is a dividend contender with 10 years of increases in the books.  The generate boatloads of free cash flow and I don't see that changing anytime soon.

I purchased the shares for $33.27 each which gave a cost basis of $33.47 after commission.  Based on the current annual dividend of $0.92 these shares will carry a YOC of 2.75% and provide $36.80 in annual dividends.  My cost basis is 15.5% below my fair value calculation of $39.62 but was above my target entry price of $30.82.  I've been off a bit on my purchases lately and should have picked up MSFT for sub-$30 but MSFT shares made a quick run up.

I plan to increase my position in MSFT because I feel there's plenty of room for growth of the company and the accompanying dividend growth.  I haven't decided if I want to add to my position through selling puts or through an outright purchase, but much of that will depend on how the markets behave.  Either one would be fine by me, although I'm leaning more towards selling a put once the price comes down to a level that provides a good combination of execution cost basis and expiration return.  There's room for me to average down my cost basis and hopefully I can get a good opportunity to do so.

This purchase brings my forward 12-month dividends up to $2,480.51 and are now 70.87% of the way towards my goal of hitting $3,500 by the end of 2013.

No comments:

Post a Comment