I’ve got a brief update on my latest Portfolio transaction. This past week I made my 2nd purchase of one of my newer Portfolio holdings… one that entered my Portfolio at the end of last year.
I’ve been looking to build this position since it started so small. If I could add those extra shares and do it at a price per share that’s lower than my initial purchase, that would be outstanding. This latest purchase met that criteria, so I lowered my cost basis, too.
One thing that excites me about this purchase is that it’s a stock in the Information Technology sector. I’ve been trying to increase my weighting in the sector for many months, so when I got the opportunity to do that, it was great.
Let’s check out the purchase details…
Accenture (ACN)
I really like the performance that ACN has posted over the years. It’s not too often I see a company with such stellar metrics. Its earnings and free cash flow per share have each been rising for over a decade, outstanding share count is trending down, returns on equity and invested capital are each north of 30%, margins are stable and above preferred norms. To top it off, there’s no debt.
Throw in the double-digit dividend growth over the past decade, low payout ratios, and a yield that’s creeping up towards 2% and there’s a lot to like.
Can this continue? It seems like it. Over the next couple of years, analysts see 10% EPS growth. That sounds good to me.
My first foray into ACN was this past December when I established my position by buying 10 shares at $259/share. The stock climbed in price to start the year, so I held off on further purchases. However, the stock has dropped over 10% in the past month, passing right through my initial buy price and even passing my target level for an additional purchase. Thus, it was time to add.
On 3/15/23, I bought 5 shares of ACN at $244.00, for a total of $1,220.00. The stock was yielding 1.84% at that price, which is a little less than 1 percentage point below my current Portfolio average of 2.94%.
My ACN position grew by nearly 50%, with the number of shares I own rising to 15.04 shares. The purchase lowered my cost basis to $254.07/share.
My Portfolio’s annual forward dividend income increased by $22.40 with the purchase.
I’ll definitely be on the lookout for an even lower share price for ACN. Right now this still my 2nd smallest tech holding, but I’d love it if it moved up in my sector rankings.
Overall, ACN is my 48th largest position out of 60 stocks. It sits behind OGE Energy (OGE), but managed to climb past my smallest tech holding, Amdocs Ltd. (DOX), with this purchase.
With ACN being an existing holding, the number of stocks in my Portfolio remained at 60.
Summary
About half way through the month of March, I made my 2nd purchase for the Portfolio. I added 5 shares of ACN, enhancing my position and bumping up the weighting of Information Technology in my Portfolio… something that’s been difficult for me to achieve.
My ACN position rose from about 10 to 15 shares. With the stock’s price drop compared to my initial purchase, I was able to lower my cost basis by about $5/share.
The purchase resulted in an investment of $1,220 into my Portfolio. In addition, my forward dividend income rose by $22.40.
I was happy to add more shares of this excellent performer. Hopefully, I’ll get the chance to add even more over time and make ACN a major piece of my Portfolio.
Do you have stocks in your portfolio that impress you with their metrics? What about any companies that operate their business without the potential burden of debt? Please share in the comments!