Wow, wow, wow!  What a week in the stock market!  I hope you were strapped in for that decline.

I wasn’t planning to have any more transactions in this last week of the month, but I couldn’t remain on the sidelines.  So much for February being less eventful than January.

As it turned out, I funded most of my purchases by trimming some other positions.  However, I did deploy some cash as well.  In total, I ended up trimming 3 positions, and making 2 purchases.  One of the purchases was to an existing (but still rather new) holding, while the other purchase introduced a new stock to my Portfolio.

With the markets in full decline mode this week, all my partial sales looked timely, while my purchases did not.  However, I’m not focused on that.  Instead, I was happy to continue to transform my Portfolio a bit more.  Essentially, I continued de-emphasizing a couple of REITs that I’ve already pared back in recent weeks, I decreased a position that’s been a less-than-stellar performer for me over the past few years, and then used those proceeds to boost my position in a rather new holding, and also initiate a new position in a stock that’s finally reached a price level I can stomach.

Let’s check out the details for my recent transactions…

 

Crown Castle International (CCI)

I trimmed about 10% of my CCI position a little over two weeks ago at what I felt was a lofty price.  Yet that didn’t stop the stock from continuing to climb another 10%… to the point that the stock truly felt overvalued.  So, selling some of these shares to have extra cash for new purchases was the way to go.

This time around I sold 20% of my remaining CCI position.

On 2/25/20, I sold 10 shares at $162.99/sh.  After the SEC fee, the sale proceeds were $1,629.86.  My CCI position now sits at 40.504 shares.  At my sale price, CCI shares yielded 2.94%.

I was able to sell these shares a day or so prior to CCI’s quarterly earnings report, in which it was disclosed that some previous annual financial reports are going to be restated.  As a result the announcement, and of course the market’s negative action in general, the stock closed out the week trading at $143.29… some lucky timing here.

The sale resulted in a long-term capital gain of $809.86.

A reduction of $48.00 in annual forward dividend income also occurred with the sale.

 

Realty Income (O)

I trimmed my O position by 20% a little over a month ago.  I was happy to sell at $77/sh.

Since then, this REIT also climbed higher in price, climbing to over $81/sh. by the time I sold.

With the stock holding up well compared to other stocks during the start of this week’s declines, and with an opportunity to trim again at an even better price than last month, I sold 15% more in order to raise some additional cash.

On 2/25/20, I sold 15 shares at $81.0726/sh.  After the SEC fee, the sale proceeds were $1,216.06.  My O position dropped to 85.284 shares.  At my sale price, O shares yielded 3.44%.

The timing on this sale turned out well, too, as the stock price for O finished out the week at $72.39.  O remained my largest REIT position, but it’s been trimmed to a level I’m happier with.

The sale resulted in a long-term capital gain of $381.46.

A reduction of $41.85 in annual forward dividend income also occurred with the sale.

 

Broadcom (AVGO)

With the proceeds from the two sales above, I continued to increase my stake in a position I initiated only 1 month ago… AVGO.

I increased my AVGO position by 50% thanks to the new shares I’ve added, lowering my cost basis in the process.  The purchase continued to bolster my Information Technology sector holdings, one of my goals for 2020.

AVGO is now just outside of my bottom 10 positions by value… so it’s moving up the ranks nicely.

On 2/25/20, I purchased 5 shares of AVGO at $282.50/sh, for a total of $1,412.50.  The stock yielded 4.60% at my purchase price (well above my Portfolio average of 2.94%).

This purchase resulted in the addition of $65.00 in annual forward dividend income.  My first AVGO dividend should be received next month, and it should make a healthy debut.

 

Gilead Sciences (GILD)

My last trim was to GILD.  The stock was trending higher in the face of the market’s declines thanks to the possibility that one of GILD’s drugs may be effective in treating those affected with the coronavirus.

GILD has been trading between $60 and $70 for quite a long time, so to see it break above that level was nice.  GILD has been one of my Portfolio laggards in terms of performance, so I lightened up on my position while the stock was performing well in order to help fund my purchases.

On 2/25/20, I sold 25 shares at $75.00/sh.  After the SEC fee, the sale proceeds were $1,874.96.  My GILD position now stands at 111.983 shares.  At my sale price, GILD shares yielded 3.63%.

While GILD did climb a bit higher in price shortly after my trim, it ended the week lower, at $69.36.  So, favorable timing on the sale again.

The sale resulted in a long-term capital loss of $200.79.

A reduction of $68.00 in annual forward dividend income also occurred with the sale.

 

Automatic Data Processing (ADP)

ADP is a stock I’ve had my eyes on for a while.  This is usually a stock that trades with a premium, so I wanted to wait to initiate a position until the price seemed fair.

Well, thanks to this week’s declines, ADP reached a point where I was willing to buy.  In fact, I made 3 separate ADP purchases during the week.  The first and second buys were to build my position, while the third was to average down in the wake of additional price drops during the week.  This is obviously where the bulk of my purchasing was focused.

On 2/25/20, I purchased 10 shares of ADP at $167.00/sh, for a total of $1,670.00.  The stock yielded 2.18% at my purchase price (below my Portfolio average of 2.94%).

On 2/26/20, I purchased 10 shares of ADP at $166.96/sh, for a total of $1,669.60.  The stock yielded 2.18% at my purchase price.

On 2/28/20, I purchased 5 share of ADP at $153.435/sh, for a total of $767.18.  The stock yielded 2.37% at my purchase price.

At the end of the week, ADP ranked as the 40th largest position in my Portfolio by value.  That’s a good start.  This will be a position to grow.

This trio of purchases resulted in the addition of $91.00 in annual forward dividend income.

As I do with new Portfolio positions, let’s take a quick look at ADP’s dividend growth history dating back to 2000…

 

This looks great over all the reporting periods, with the shorter time periods looking especially strong.  Hopefully, this results in a reversal of the declining 10-year dividend growth rate.

ADP’s payout ratio is currently a shade below 59%, a number I’d like to see them shrink over time.

ADP has a 45-year streak of consecutive annual dividend increases.  That’s only 5 years shy of becoming a Dividend King!

 

Summary

It was an active week in the stock market, and also in my Portfolio when it came to transactions.

I trimmed 3 positions (CCI, O, GILD), added to 1 position (AVGO), and initiated 1 new position (ADP).

The 3 partial sales resulted in total long-term capital gain of $990.53.

The result of all the transactions was a net investment of $798.41 into my Portfolio.  However, there was a net decrease to my annual forward dividend income of $1.85.  The lower yield on my biggest purchase (ADP) relative to the yield on my trims led to this minor income loss.

With no positions sold completely, and one position initiated, the total number of stocks in my Portfolio ticked up to 49.

Unlike last week, this time I can safely say I’m done trading this month.  How can I say that?…  No trading days left!  🙂

 

Did you finally get a chance to buy a stock this week that you’ve been waiting to see decline?  Please share in the comments!