Bert’s Recent Stock Purchases – Part 2 – October 9 – 12

Man oh man has October been exciting so far.   Lanny and I started off the month strong by making several rounds of investments (Lanny’s summary article can be found here and mine can be found here).  We were feeling pretty happy with our decisions.  On top of it, I created a dividend stock watch list to prepare myself for another set of purchases.  Then, well, we all know what happened.  The market had a massive two-day sell-off.   Many investors capitalized on the downturn and we have been seeing a lot of purchase articles featuring some great stocks.  This may be one of those articles, as it reflects my purchases from right before and during the October sell-off.  The splash isn’t as large as you might have thought and we are still being patient.  But I did have the chance to purchase three different stocks last week.   Here is a summary of my second round of purchases in October!

Purchase #1:  WestRock Company (WRK)

I didn’t go very far for my first purchase.  This was one of the first companies on my October dividend stock watch list.  At the time I created my watch list, WRK’s stock price was $50.56/share.  With a price of $50.56/share, WRK’s P/E ratio was $12.4X and the rest of their metrics checked out.  WRK was looking undervalued.  Then, on 10/9/18, I checked the market shortly after open and noticed that WRK’s price was down over 8% that day!  I immediately purchased 3 shares with the capital and picked up 4 shares at $45.06.  At that price, WRK’s P/E ratio had fallen to 11.07X.   I then subsequently picked up 6 more shares that day at a slightly higher price.

After doing some research about what caused the dip, there were two items I could identify.  First, WRK announced that their operating facilities were impacted by the unfortunate hurricane that struck North Carolina, causing delays in production.  The company was also experiencing some increased costs as a result.  With these events in mind, management stated that their quarterly earnings would be impacted.  In the short-term, there will be some pain.  But in the long-run, the company should recover from the storm and return to operating in a regular business environment.

Here is a summary of the two purchases I made:

10/9/18: 4 Shares @ $45.06/share – Cost Basis of $180.23

10/9/18: 6 Shares @ $45.50/share – Cost Basis of $273.00

The 10 additional shares added $17.20 in dividend income to my forward income  Now, I own 45.194 shares of the company and my position produces $77.33 in dividend income annually.   There was one annoying thing about this purchase though.  This was made before the big market sell-off.  And trust us, WRK was hammered by the sell off.  The company’s price fell to the low $40/share range.  If I would have known, I would have waited to make this purchase for sure.  Oh well, what can you do, right?  For now, I’m happy I was able to purchase WRK at a discount and continue to lower my cost basis in the dividend stock.

Purchase #2: Iron Mountain (IRM)

Ah, onto my next purchase.  IRM….another stock on my watch list.  I have been adding to my position in small chinks for the last few weeks. In my watch list, I showed that the company’s metrics passed our stock screener.  So I won’t share the details once again in this article.  In my last purchase article, I mentioned how I added 35 shares over two purchases.  The lowest purchase price was $34.21/share.  Similar to WRK, after my first set of purchases, IRM’s price continued to fall.  If I liked the company at one price and there were not any significant news releases after the purchase (which there weren’t), why wouldn’t I continue to add when the price continued to fall?  Well that is exactly what I did and here is a summary of those purchases.

10/10/18: 13 Shares @ $32.88 – Cost basis of $427.42/share

10/11/18: 5 Shares @ $31.69 – Cost basis of $158.45/share

The additional 18 shares added $42.336  to my forward dividend income.  Now, we own 53 shares that produce $124.66 in dividend income annually.  If the price continues to fall significantly, I will look to add to my position.

Purchase #3:  Leggett & Platt (LEG)

Last, but not least, the first purchase that was not on my watch list.  This purchase was caused by a large drop in price during the market’s crazy two-day stretch.  If you recall, which I would understand if you didn’t, I established a large position in LEG back in the second quarter.   I purchased 67 shares of the company at $41.57/share.  It was a large enough position where the company was off-my radar.  It also helped that the company’s stock price took off immediately after my purchase.  So it made sense to look elsewhere at the time.

Then, after updating my portfolio last Thursday, I noticed that LEG’s price had fallen drastically.  The company’s stock price was trading well below $40/share and their stock price is down over 16% during the month.  The month wasn’t even halfway over yet!  Suddenly, I was staring at an unrealized loss.  So I quickly ran LEG through our famous Dividend Stock Screener to see the metrics.  I used a share price of $40/share at the time of the analysis, forward EPS of $2.61/share per Yahoo! Finance, and an annual dividend of $1.52/share.   Their P/E ratio was 15.3X and their dividend payout ratio was 58%.  Both pass the first two metrics of our stock screener.  In terms of having a history of increasing their dividend, the fact that LEG is a Dividend Aristocrat speaks for it self.  Obviously LEG passes.

10/12/18: 7 Shares @ $38.83 –  Cost basis of $271.81

This purchase added $10.64 in dividend income to my portfolio.  In total, I own 74 shares and my position produces $112.48 annually.

Summary

This wasn’t the largest splash in the market, which may surprise some of you given the decrease that we’ve realized over the last few days.  But in total, I was able to purchase $1,310.91 of stock during this span.  The new purchases added $70.176 in dividend income to my portfolio.   My yield on cost for the purchase is 5.35%.  Not too bad!   One interesting tidbit is that each of these purchases will bolster my “off months.”  IRM and LEG pay their dividend in the first month of the quarter and WRK pays their dividend in the second month.  It is always nice to bolster these two months when the opportunity strikes!

What do you think of my purchases?  What stocks have you added during the last few weeks?  Are you targeting certain companies during this sell-off?  Would you have stayed away from any of these companies?

Bert

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31 thoughts on “Bert’s Recent Stock Purchases – Part 2 – October 9 – 12

  1. Hi Bert,

    Great buys you make here
    I purchase Legget and Platt also.
    Have some cash left and will pick up ITW or WRK . but I also keep an eye at Pepsi maybe they
    drop to 100- 101 USD at the end of the week.
    Let the snowball running

    • Willem,

      Thank you very much and congrats on the purchase of LEG! ITW has swiftly moved back onto my radar with their price fall. Although the market has bounced back, I think if we are patient, the right moves will fall into our lap. Great call looking at PEP as well.

      Bert

  2. Lots of buying going on. I been buying also. Especially Friday had a big buy day. Then turned around and bought yesterday. Those are some excellent buys that you will benifit for years

  3. Great job taking advantage of the market turmoil from last week. I’d love to add more IRM here but I just don’t have any capital. There’s definitely a lot more to like with Mr Market throwing a hissy fit.

    • JC,

      Thank you very much. There will still be some great deals once you have the capital. It is always interesting when the market does this and fortunately it doesn’t happen too frequently. These wild swings are tough to predict, both negative and positive. Just when you get ready to add more, there is a day like today and the market takes off!

      Bert

  4. Great to see that you took this opportunity! I’ll guess the last week was a good example of why you should keep some spare cash for bargain trades.

    Me on the other hand sold some shares last week. I was not comfortable with the risk level of three of my positions, and initiated sell orders the very same day that we saw the market turmoil. That means I have some cash to invest now, but I’m having a hard time finding good bargains on this side of the Atlantic.

    • Thanks The Beta Post! Agree, it can’t ever hurt to have some spare cash that you are comfortable investing if the opportunity presents itself. I was fortunate enough to be able to capitalize on the opportunity this week. I’ll have to swing by and check out the detailed analysis of your moves. It sounds like you made the right decision though. If you aren’t comfortable with the position, than get it out of your portfolio! There are plenty of other fish in the sea.

      Bert

  5. Love the purchases! You guys have been busy putting that capital to work and really juicing those forward dividends–and it is great to see that you’re doing so much that it warrants combining multiple purchases into a single post! =)

    • Thanks DivvyDad! I’ve been fortunate this year and have had some extra cash laying around to invest. I’m looking forward to seeing the impact of these investments in 2019. Man it is crazy that the year is almost over. Also – congrats on your purchase of GPC. Not shocked here about that one for you.

      Bert

  6. Great series of buys Bert! Isn’t it nice to pull the trigger and watch your dividend income increase? 🙂 I made some recent buys as well, but I went with ABBV and ITW when I saw the market down turn. I am quite satisfied with the buys. Anyways, Keep up the great work Bert! 😀

    • MDD,

      That has to be one of the best feelings out there haha Congrats on the pickup and I love the ITW addition. That is very high on my list and I’m bummed I missed a chance to get them below $130/share. Hopefully there will be another shot.

      Bert

  7. WRK was completely off my radar. Thanks for pointing it out; looking at the numbers it’s a no-brainer. I’m also planning to buy if the price stays around these levels by payday 🙂

  8. Just when I think I’m ready to put some money to work then bam, the market rally’s strong. Oh well, I still think a correction is coming that will provide a great buying opportunity. Keep purchasing on a regular basis guys and you can’t go wrong over the long term. Tom

    • Can’t Mr. Market be frustrating at times? Man haha Like you, I don’t think this is the last of the market we are experiencing and there will be another crazy day or two in the future. The good news is you are prepared to strike when the moment arrives.

      Bert

  9. Some nice buys. You really picked up some great current yield with these three. While familiar with two names WRK was never even a thought for me. Thanks for highlighting another potential dividend play. Well done. Keep the buying going!

    • DivHut,

      Thanks Keith. Very much appreciated. These purchases definitely packed a punch in terms of dividend income. I owe the finding WRK credit to Lanny as he was the one that initially brought it to my intention. That’s what is nice about this community, we all share information and investment ideas with each other.

      Bert

  10. Great post, thank you for sharing. I’ve added a few shares of ALB, and JPM to my dividend portfolio. ALB doesn’t pay a huge dividend, but they have been consistent in paying one for over 14 years. And, I think the lithium battery business will continue growing for years to come. Glad I found you guys. Love me some dividends!

    • Jim,

      Thanks for stopping by! I’m not too familiar with ALB, but you have to like that dividend income streak. I’ll have to take a larger looking into this company. I’m glad you found us as well and I look forward to interacting with you more and more.

      Bert

  11. Sounds great Bert, let me know if you are interested in a copy of my scoring spreadsheet of all the dow components. Feel free to email me and I will share the sheet with you. Would love your opinion!

  12. Dang you guys are on a roll! Spending capital like it anything on great quality companies. The impact next year of all this activity will speak for itself.

    Love the IRM buy, it becoming more and more popular in the community of late.

    I already deployed my capital so I had no power left but next month will be a fresh round of money being spent. I’ll be posting my buy in a few days. Another new position. 🙂

    • Thanks Mr. Robot! IRM’s name is popping up left and right here and I really like it. I may keep adding more though, especially if this market continues. I’m excited to read about your buys here and am excited to see what you have up your sleeve when your re-inforcements, aka capital, arrive next month.

      Bert

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