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.
Nice buy of INTC! I've been wanting to pick up some more shares but just haven't gone for it yet. I have enough cash to pick up about 55 shares of Intel at today's closing price but I'm not sure if that's where I want to make my next purchase at. I want to be able to pick up about another 100 or so shares but don't have the funds. If tomorrow brings a pullback to less than $21 I just might go for it though. Great buy! I think the death of the PC has been greatly exaggerated because as of now there's no viable alternative to do productive work without one.
ReplyDeletePassive Income Pursuit: Thanks! I would have preferred to buy more shares of INTC today, but I simply ran out of cash. However, I'm fairly satisfied now with the size of my position, so I'll just watch what happens while I await new capital.
DeleteDGM,
ReplyDeleteNice move. You're cost basis is really low and with limited downside, in my opinion. I think INTC is really undervalued at current levels, and the voting machine that is the market in the short-term is definitely deeming INTC to be "unpopular".
In the long run, the weighing machine will take over and value INTC for the true company it is. In the mean time, it's prudent to take advantage of this company's unpopularity.
I'd be joining you in purchasing more myself, but with 170 shares it's already a fairly full position for me...especially as a tech company. But, if we sit here a few months from now with INTC trending at the $21-22 area I'll be buying more.
Best wishes!
Dividend Mantra: Thanks! I agree that the market has been voting against INTC rather than weighing its true value. Similar to you, if INTC is still around this level in a few months, then I would consider adding to my position, which is currently "medium-sized" relative to the rest of my portfolio.
DeleteNice buy! Seems like we are always on the same wavelength. I purchased some CMI and KMI today. Adding to my INTC position also crossed my mind as it retreated to the $21.50 level. The yield at over 4% is just too attractive. I'm running out of funds, and probably only have enough left over to make one more additional move. I'm thinking about adding more INTC or KMI, atm.
ReplyDeleteHappy hunting!
FI Fighter: Nice purchases! It certainly seems like we're on the same wavelength -- it must be some sort of DGI vibe. :)
Delete"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."
ReplyDeleteYep I know exactly how you feel! We can't control or even really predict prices short term, so why even bother? If something is attractive, it's attractive.
That said, I'm currently contempt with my INTC position. I will buy more under $20 however!
Compounding Income: Exactly -- why play the short-term speculation game when we don't have to?
DeleteI would also buy more INTC if it fell to $20.