Nearly two weeks ago I made a purchase for my Portfolio. I usually don’t go so long before posting about it, but sometimes life gets in the way.
But, wait no longer. I’m here now to deliver the details. It was my first transaction for August, and as of this post, it remains my only one.
The move provided an addition to an existing holding… a buy of a stock that, at the time, was the smallest position in my Portfolio. Did this purchase remove that label from the stock? Keep reading to find out.
This was my 2nd purchase of the stock in the past month. This time around I was able to buy with the stock price better than 10% lower than before.
After a strong start to 2024 that saw this stock climb 33% in Q1, the stock is now roughly where is started the year.
Let’s find out what stock I’m talking about and get some details for my purchase…
The Walt Disney Co. (DIS)
As you probably know, I have a goal to make all of my holdings have at least a 0.5% Value weighting in my Portfolio by the end of 2024. DIS is one of the two stocks that don’t currently meet that criteria.
As a result, the stock has been on my watchlist, and I’ve been looking for an opportunity to add. After peaking at over $123 in early April, the stock has made a steady decline and now trades in the mid to upper $80s.
I made a DIS addition last month at $96.486. I was happy with the price at that level. But over the course of the past month, the price has dropped further after the company failed to impress with its 3rd quarter earnings. The theme parks business is now showing some weakness. In addition, DIS may need to pay Comcast (CMCSA) more for the remaining portion of Hulu than previously thought. However, on the bright side, DIS recently recorded its first-ever streaming profit, and its recent slate of movies has fared well at the box office.
In any case, if I liked the stock in the mid $90s, how could I not like it with an additional 10%+ discount. So, I decided to add some additional shares and see if I could get DIS closer to that 0.5% weighting I desire.
On 8/9/24, I bought 5 shares of DIS at $84.80/share for a total of $424.00. The stock was yielding 1.06% at that price. This yield is less than half my current Portfolio yield of 2.60%.
My DIS position grew by 14.18% with this addition, bringing my share total to 40.251 shares. The purchase lowered my cost basis by $0.98/share, to $91.77/share. I’m still a bit in the red with this position… one of a handful within my Portfolio.
My Portfolio’s annual forward dividend income increased by a mere $4.50, due to the low dividend yield offered by DIS.
Unfortunately, my buy didn’t stop DIS from retaining the label of “my smallest Portfolio position”. Nor did it get the stock to a 0.5% Portfolio weighting, although one more similar-sized purchase would do the trick.
With DIS being an existing holding, the number of stocks in my Portfolio remained at 57.
Summary
With my first Portfolio transaction of August I added a small group of DIS shares. With DIS continuing its decline and reaching a new low for 2024, it seemed like a decent time to add, especially since my $90 price target had been breached by a solid amount.
My buy of 5 shares resulted in an investment of $424 into my Portfolio, but my forward dividend income only increased by $4.50.
My DIS position grew by more than 14%, and my cost basis dropped by roughly $1/share.
DIS remains my smallest Portfolio position, but it’s creeping up on McCormick & Co. (MKC) in an attempt to lose that title.
I’m open to adding more shares of DIS as long as it trades below $90.
Are you holding any DIS shares? Does it appear to you that its business may be taking a turn for the better? What’s your favorite stock in the Communication Services sector? Please share in the comments!