The market dropped close to 1.5% yesterday (3/6/2015) and this caused almost all the stocks to drop irrespective of the sector or size. I have been eyeing to add to my position in Philip Morris (PM) for a while now and was waiting for the price to hit 80 and it did on Friday.
I purchased 19 shares of PM at $80.35 on 3/6/2015. With commission, the total cost comes to $1,533.65. With a quarterly dividend of $1.00/share, the yield comes to 4.96% and this purchase adds $76.00 to my forward annual dividends. The current price was below my average price and hence also enabled me to average down on the stock.
PM stock is under lot of pressure primarily due to the strength in dollar. PM does all its business outside US and therefore a strong dollar will negatively affect its earnings. But I feel that in spite of this, the stock is a good investment for the long term and pays a nice dividend while it rebounds. My previous purchases in PM are listed below.
- Purchased 25 shares @81.50 on 1/27/2014 – my initial purchase
- Purchased 4 email@example.com on 12/8/2014 – as part of FRIP purchase
As you can see, the stock has been dead money since my initial purchase and was below my average price, but as I mentioned I am hoping the stock is a good investment for the long term as the currency issues go away.
Morningstar has a fair value of $92.00 for the stock and it is rated 4 stars.
While I have been making weekly purchases regularly, this is my first big purchase for the year. I hope the market continues to be under pressure thus providing some good buying opportunities.
The portfolio page will be updated soon to reflect this purchase.
Disclosure: Long PM
Image courtesy: http://www.pmi.com/