Friday, February 8, 2013

New Buys & Sells

As part of my goal of achieving $5,000 of dividends this year, I need to replace some of my non-dividend paying holdings with dividend payers. I held a few larger positions in companies that I bought at low prices that have increased quite a bit in value. Not only did the size of the holdings as a percentage of my portfolio get too high for my comfort, owning large quantities of these stocks did not help get me to my goal.

Today, I sold 1,000 shares of SIRI at $3.14 and 250 shares of PPC at $9.00 for a total of $5,390 of proceeds. I used this cash and some new cash to buy 150 shares of PEYUF at $23.67, 75 shares of BTE at $47.40, and 50 shares of AFL at $50.20. This is a net increase in equity exposure of $4,225.50. The purchases will add $375.80 to my annual dividend income.

It may seem a bit odd that I'm adding exposure to stocks after providing a bearish market outlook, but rest assured my view that a correction is imminent remains as strong as before. You see, in my industry we get paid a sizeable bonus during the first quarter of the year. Since I have no need to spend the money, I will use it to add to my brokerage account. By adding slightly to my exposure this week (at attractive prices for the stocks I purchased), stocks as a percentage of my net worth will be flattish - perhaps even down a bit. The influx of cash will give me dry powder to take advantage of any corrections that may be on the come.

SIRI: Purchased initial position of 2,500 shares at $0.65/share and got up to 10,000 shares with an average price of $1.00. Have been selling a little bit here and there since $2.50. Still own 1,500 shares.

PPC: A company I still like, but it's had a strong run recently. I don't see what drives it higher and think it's fairly priced. I still own 250 shares.

PEYUF: A Canadian natural gas driller. These guys have a sub-$2.00 break-even price, which leads the industry by far! I'm a natural gas bull, so this is a great way to play any further weakness while getting a 3% dividend along the way.

BTE: A Canadian heavy-oil producer that pays a juicy 5.6% dividend in monthly increments. If Keystone XL gets approved by John Kerry, heavy oil price differentials should continue to narrow.

AFL: Insurance company that got beaten up after reporting results. I've been eyeing this for a while, so the pullback is a great time to get in.

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