Thursday, August 25, 2011

Recent Buy

How does the saying go? You can't keep a good man down? can't keep a value investor out of a depressed market! My available capital has been extremely limited lately, as I deployed all of my dry powder during my recent buy streak, adding to my position with CVX and initiating a position with COP.

I decided to pull some money out of my emergency fund to make a purchase. I have typically had a high amount, for my personal circumstances, set aside as an emergency fund for myself. I'm single, and I don't have any major liabilities. I don't own a home or a car. I am not married and I don't have children. Due to this, I think that carrying a smaller balance in my emergency fun in the short-term will be fine as I dry it up a little to make a purchase. I didn't alleviate the entire fund, just a portion of it. I'll likely build it back up over the next couple months as my expenses continue to decrease and my income (hopefully) increases in turn.

With my new-found capital I decided to add to my holdings with ConocoPhillips. I've been a little high on energy lately, and my spree of buying up equities in Big Oil is coming to an end. Energy now comprises of just under 25% of my entire portfolio, which in my eyes is too large an allocation for one sector. I don't have a firm number, but I think keeping individual sectors to no more than 20% of an entire portfolio is probably prudent. Allocation levels can be managed and balanced actively, so I'm not concerned about this. As I buy equities in other sectors my energy allocation on a percentage basis will decrease.

I purchased 18 shares of ConocoPhillips (COP) on 8/22/11 at $63.65 a share. I was happy with this purchase. My entry point on a per-share basis was much lower than my initial purchase which lowers my overall cost basis on this position. This purchase doubles my position with COP.

The yield on my purchase is at 4.14%, which is absolutely solid. It will provide me with a yearly dividend total of $47.52 based on the current payout. I'm ecstatic with this entry yield. I am very bullish on energy, if you couldn't tell by my last three purchases. This sector is currently overweight in my portfolio, so my next few purchases will be in other sectors...likely to be consumer staple and finance sectors.

S&P currently has COP at a 4-star BUY with a 12-month target price of $93.00. Morningstar currently rates COP as a 5-star value. I'm in good company!

What are you buying?

Thanks for reading.

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