The market continues a crazy August. After a few weeks there was a solid selection of opportunities afoot, the market suddenly turned and now the opportunities are far and few between. Luckily for me, I had the opportunity to continue building a position I initiated earlier in the month.
At the beginning of August, I purchased 10 shares of Illinois Tool Works (ITW) at $139.89/share. Since we’ve written about this stock a lot over the last few weeks, I will defer you to my initial purchase article (linked above) and Lanny’s purchase article for a details about why we purchased this Dividend Aristocrat. So I’ll keep this update pretty brief!
At the time of my purchase, ITW passed the metrics of our stock screener! Our screener includes reviewing the P/E Ratio, payout ratio, and growth history of the company. Well, what do you know, after my initial purchase, the company’s share price continued to fall. So if the company passed our metrics then, why wouldn’t I add to my position if the price falls? That’s exactly what I did. Thank goodness I have free trades and was able to pick up shares twice! Here were the purchases:
Purchased 5 shares of ITW on August 10, 2018 at $136.62/share
Purchased 7 shares of ITW of August 15, 2018 at $135.58/share
The 12 additional shares added $48 in forward dividend income to my portfolio. Not a large amount, but I’ll take it! I now own 22 shares of ITW, which produces $88 in dividend income. I can’t wait to get my first $22 dividend here in October. In addition, I was able to lower my cost basis by a few dollars since the purchase prices were a few dollars lower.
I told you this update would be brief. I’m excited to have had the opportunity to establish a large position in this Aristocrat. If the price continues to fall, I’ll continue building this position now that the dividend yield is closing in on 3%.
What are your thoughts about my purchase? Would you have continued adding to Illinois Tool Works if you were me? What other stocks are on your watch list for the rest of the month/beginning of the next month?
Bert
Great news! Such a solid company, it even deserves to be bought multiple times haha! You added nice forward income and some solid stable shares to your portfolio, nothing wrong with that!
DI
Thanks DI! I love this purchase and I have a hunch I’m going to be thanking myself for purchasing this stock so many times in a few years haha I may have even bought a few more today 🙂
Bert
For sure you will be able to look back very proud in 10/20/30 years! I’m very close to buying some myself too!
DI
Well done, and you’re right that the opportunities have dwindled a bit. I’ve been looking to deploy some new capital but my current targets haven’t been met so I am remaining patient. You have to love those free trades too!
DivvyDad,
Stay patient and wait for your price! There will be plenty of buying opportunities for you to capitalize over 🙂 These free trades have been great and I forgot how much fun it was to buy small amounts of stock.
Bert
Nice buy Bert! I do this too sometimes – buying a stock and then (after a price drop) pick up more a few days later. If I like a stock at a price of X, I like it even more at X minus 5%!
I just published my watchlist of September btw… ITW was not on my radar, but inspired by your post I will take a closer look!
Cheers!
Thanks Tall Investing! Glad I’m not the only one to continue to buy companies when their price falls. I’m excited to swing by and take a look at your watch list. Stay tuned for a comment.
Bert
Great buys Bert! ITW is hot a my watchlist, but I will need another months time to reload my cash for a new purchase, lol. We will see what happens by then. Congrats on the great buy(s) Bert! 🙂
Thanks MDD! Hopefully ITW will stay at a low enough price while you retool. If not, there will be plenty of other buying opportunities out there I am sure.
Bert
hey Bert
Sweet buys, and a nice boost to the forward income.
free trades are the best, i definately would of kept averaging down.
keep it up
cheers
PCI,
Thank you very much! I concur about free trades, I’ll continue to leverage them and lower my cost basis if the opportunity presents itself. Take care!
Bert
ITW is a solid buy with a yield approaching 3%. I can’t blame you for averaging down in a company with strong fundamentals like ITW.
Thanks Kody – Much appreciated! Hopefully I will be able to continue averaging down over the next few weeks or so. Would love to receive at least 1 share via drip from them annually 🙂
Bert
Hi Bert – Been following your blog for a couple of years now, finally mustered the courage to post a comment. Solid buy on ITW, wish I had your discipline to not chase growth stocks.