Today I bought shares of Intel (INTC), the world's largest semiconductor chip maker. I wrote about INTC last month when I started a position in the stock. Its price has continued to trend down over the past few weeks, making the stock even more undervalued than before. The company reports its quarterly earnings on October 16, but I do not like to guess how the market will react to earnings, so I deemed it best to take advantage of the buying opportunity already in front of me.
I bought 50 shares of INTC at the price of $21.70 per share, giving me a total of 115 shares at an average price of exactly $22.22 per share (some nice symmetry there) and a 4.03% yield on cost. At the current dividend rate, I can expect to receive quarterly dividends of $25.88, which is $11.25 more than before this purchase. INTC will now contribute a total of $103.52 to my annual dividend income, an increase of $45.00.
My three purchases this week used up all my cash, so I will be waiting on the sidelines until I have new capital at the start of November. On the one hand, this means I will not be able to take advantage of any dips due to earnings that "miss" analyst estimates in the coming weeks. On the other hand, desirable dips might not happen (such was the case in July) and the opportunities that resulted in my recent purchases might be gone by the end of the month. I am continuing to teach myself that it is better to capitalize on good opportunities when they are present than to speculate about future opportunities that may not come to fruition.