I have one transaction to cover to close out last month.  It was a sale that I made late in November, and I’m just getting around to sharing it now.

The sale was not a complete exit of the position, but rather a trim.  In a few of my Portfolio Thoughts posts over the past few months I’ve mentioned wanting to trim my position in this particular stock should it reach the price target I set.

Well, the price target was reached and I pulled the trigger on the sale.  I now find the size of the position to be more to my liking, especially since this is a high-yielding stock (which I don’t have many of in my Portfolio).  The company’s negative sales growth over the last couple of years has made me want to lighten up on the stock.

One negative from trimming such a high-yielding stock is the dent it puts in your forward dividend income.  I definitely had a noticeable decline in my income, but I hope to rectify that in fairly short order (i.e. over the next month or so).

Here are the details for my latest of Portfolio transaction…

 

Altria Group (MO)

I’ve been looking to trim my MO position for a while.  While I like the dividend income, sales growth has stagnated, even though earnings have still managed to creep higher.

MO has run up in price recently… to the highest it’s been in about 6 years.  It’s at the point where the shares are looking a bit overvalued.  The stock price is also at the point of matching the price I paid for my most expensive shares, so selling those seemed appropriate, as I was able to exit with the smallest of gains.

I chose not to exit my position entirely, but instead reduce my exposure to this high-yielder.  If things ever went sour with MO, I wouldn’t want to have to quickly sell and then scramble to figure out how I’m going to replace the lost dividend income.  This method gives me a chance to slowly transition away from MO.  Should revenue and earnings start to grow again, I can look at increasing my position in the future.

On 11/27/24, I sold 50 shares of MO at exactly $58/share.  The sale proceeds were $2,899.92 after the $0.08 SEC fee.

At my sale price, shares of MO yielded 7.03%.  This yield is 2.8x greater than my current Portfolio yield of 2.53%.

With this sale, I realized a long-term capital gain of $0.97.  I sold the most expensive shares I had purchased, ones from June 2018.

The sale also resulted in a hefty reduction of $204 in annual forward dividend income.  Ouch.  I’ll try to recoup the lost income over the next month or two.

My position size was reduced by 33%.  I still own 100.107 shares of MO though.  However, the reduction in position size moved MO into the Bottom 10 of my Portfolio rankings, as it’s now my 10th smallest Portfolio holding.

 

Summary

I managed a 2nd Portfolio transaction in November.  A stock I’d been looking to trim (MO) hit my target sale price, so I went forward with the sale.

I sold the most expensive shares I purchased, which happened to be from my initial purchase back in June of 2018.

While I was able to reduce my exposure to the stock, as I’d wanted, the trim did reduce my forward dividend income a good amount.  So, I’ll be looking to recover from the trim from that aspect.

The trim resulted in a net withdrawal of $2,899.92 from my Portfolio.  My annual forward dividend income decreased by a substantial $204, too.

I recorded a long-term capital gain of only $0.97, as the shares I sold were just slightly higher in price than when I bought them 6+ years ago.

The trim knocked MO into the Bottom 10 of my Portfolio ranks.  Since I’m not currently reinvesting my MO dividends, the position won’t be growing in size unless I decide to buy shares again in the future.

With MO remaining in my Portfolio, the number of stocks in my Portfolio held steady at 58.

 

Do you own MO?  How are you feeling about the company’s prospects moving forward?  Are you concerned about their declining sales at all?  I look forward to your comments!