Monday, June 24, 2013

Recent Buy

I'm reporting another purchase from Friday to go along with my purchases of Chevron and ExxonMobil.  This one came right before the close of trading and was very much welcomed.  I didn't get the cheapest price because I missed out on following the market during the 2 big drops last week, but quality time with family came first.  And I still got some good deals.  I've been trying to focus on adding to current positions rather than initiate new ones and luckily most of those have been going on sale.  What a strange turn of events June has brought.  At the beginning of the month I was frustrated about having way too much cash on hand and now I'm sitting here wishing for more.  I still have enough free cash to make another purchase or two but I can't go overboard due to my open option positions, especially since they were sold on margin.  Anyways, let's get into the details.

I purchased 20 more shares of Phillip Morris (PM) for $87.4899 each.  After commission my per share cost basis works out to $87.89.  Based on the current annual dividend of $3.40 these shares will carry a YOC of 3.87% and provide an extra $68 in annual dividends.

I didn't get to average down my cost basis with this purchase but I'm still very pleased with the entry price.  It's been a while since PM has seen current prices and a much welcomed opportunity. My average cost basis actually increased by 1.58% to $86.19.  No worries though.  I was hoping to pick up shares at the 4.00% yield level but just didn't want to wait for it.  Especially with the upcoming ex-div date on June 25th.  I should receive 2 payments from PM this year and I really like that they pay on a different schedule than most.  The upcoming dividend increase for October's payment is just icing on the cake.

My FI Portfolio's forward 12-month dividends are now at $2,999.92 which is 85.69% of the way towards my goal of $3,500 by the end of 2013.

I've updated my Portfolio page to reflect this addition.

Have you been taking advantage of the recent pullback in the markets?  Do you think it will continue or has the rally begun?  

12 comments:

  1. Yields go up the place to invest new money now is health care. I bought JNJ, ABBV and BMY on Friday at the open and they are all up today.

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    1. Anonymous,

      I'm still trying to get some JNJ into my portfolio and more healthcare in general. I don't own a lot so hopefully I can pick up some of the great ones.

      Thanks for stopping by!

      Delete
  2. I noticed PM has come down quite a bit from its highs. It's certainly on my list to add more but I'm still fairly comfortable with my tobacco exposure. The market is starting to show a little more value. Good luck.

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    1. AAI,

      I kind of missed it but then luckily I stumbled on it. I was glad to see the pretty significant pullback because I've been wanting to add more for a while now. I don't think you can go wrong with PM because the international tobacco market is still growing at a significant rate.

      Thanks for stopping by!

      Delete
  3. Nice move on PM. It's dropped about five dollars from the close a week ago, so you got a nice price on a quality stock. I added some KO today @ $39.63. Have a great week!

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    1. daebu,

      Nice add on KO! I think I'm done adding for the time being unless we see the low $38's. I was glad to pick up some more PM because I expect great things from them as a DG stock.

      Thanks for stopping by!

      Delete
  4. Pursuit,

    Very nice purchase. I'm very bullish on PM long-term, but since it's already my largest position I'm holding firm right now. If I didn't already have such a large position with the company I'd be buying shares right now. My tobacco holdings are already a tad large for my comfort levels, but I think you'll be very happy with this buy. PM is a prodigious cash flow generator.

    Best wishes!

    ReplyDelete
    Replies
    1. DM,

      Long-term I expect PM to have great price appreciation and great dividend growth. I hear you on holding off. I need to stop purchasing energy related stocks because they are my largest, especially with my ESPP shares included.

      Thanks for stopping by!

      Delete
  5. I also noticed the recent decline in the price of PM. If I had new capital available, then I would also consider buying at this price. Nice purchase!

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    1. DGM,

      I had missed it at first but was glad it was still there when I finally saw it because I've been trying to purchase more shares for a while now but never got the opportunity too. Well no opportunity at a solid price that is.

      Thanks for stopping by!

      Delete
  6. Nice buy. I've held PM in the past. It continues to generate great returns and significant cash. I recently purchased LO,so I have all the tobacco exposure I'd like for the moment, but I think PM will serve you in good stead.

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    1. Integrator,

      You can't argue with their ability to generate cash flow. The debt levels are a little concerning, but since management has been taking on cheap debt that costs less than the dividend yield and purchasing shares I'm okay with it since it seems prudent. I also have a stake in LO and my total tobacco exposure is up to around 5.5% of my portfolio so I think that's good enough for now. Although a further drop in PM is going to be very tempting.

      Thanks for stopping by!

      Delete