As the market continues its emerging market driven rout, a lot of great blue chip companies are seeing significant drops in price. This is resulting in more of my limit orders being triggered.
When I checked the markets today Philip Morris was trading below 79 dollars, well below my $80.01 limit price. My order was fulfilled at exactly $80 per share , resulting in a purchase of 32 additional PM shares at a cost basis of $2560. This latest addition to my holding has a beginning dividend yield of 4.7%.
Philip Morris is now my largest individual equity position – ignoring my 401(k) index funds, which I don’t discuss on this blog. I have a total of 92 shares with a current valuation of over $7,300. This will result in an annual dividend payout of $345 into my Traditional IRA account. Dividend Growth Investor has a great article on some of the merits of PM.
I still do have some uncommitted cash in that account, so could potentially buy more if the price continues to drop. History shows that price drops in tobacco stops are just a chance to buy cheap and make even bigger returns in the future, and I am confident that this approach will hold true – however, I am not certain! Given that I will try (and maybe even succeed) to resist the cravings to build this position further for now. Although, only 8 more shares would round my position to an even 100…
Hopefully if the markets continue to tank some of the other securities I’m pursuing will come into buying. I have an order to add more KO at a limit of $36.77, compared to the closing price today of $37.90. It does not seem inconceivable that this could trigger in the next couple of days if Mr Market continues with his present sour mood. I also hope to add some more Exxon-Mobil or Nestle if their prices dip down far enough.