Tuesday, June 27, 2017

Recent Buy GE and rethinking strategy for the summer.

My very first purchase of my Dividend Journey was a single share of GE. I knew very little at the time and the purchase was largely symbolic. GE was a company I knew and had a price I could afford. I felt like they were a company that would be around for a while. At the time I was trying out  Robinhood to see if I liked it. I only had $30 to invest. So I thought why not. Had I been give the opportunity to do it over I probably would have picked something else. In fact I almost sold the share twice this year, simply because I had not plans to add to it.

But then I did. This was a pure value play here. I got two shares of GE@ $27.54 per share or $55.08 The share price is relatively low for GE. There is some positive buzz around GE right now since Jeffrey Immelt stepped down. The consensus 12 month price target is close to $32. Morningstar gives GE a four star rating. The payout ratio is at 58.9 percent and the yield is a solid 3.50% The P/E ratio is a high for my liking but also near a 52 week low for GE. This signals to me the stock is undervalued. I don't love this stock overall, but at this price I'll take a nibble.

Summer Thoughts:

In other news I think I need to remind myself to be a more patient summer investor. The combination of not having to bring a lunch to work, no dry cleaning and less driving has left me with a little extra cash this month. Also being a quarter month has contributed to the flow. I've found myself with a little more cash week to week, which has contributed the the flurry of very small buys. I'm okay with it because I've mostly added to existing positions and brought down my cost basis. But being reflective, I think it might have been a better strategy to settle on one position and enter a little stronger. Especially since was spreading out a relatively small amount of money.

2 comments:

  1. Over the long haul, I don't think it matters that you spread your money across existing positions rather than focusing on one position, but I do think there is something to be said about the power of focus. So, I do like the idea of focusing on one position and entering a little stronger.

    Having a little extra cash is not a bad problem to have, but I can't argue against being more patient, even though that probably should apply not just during the summer, but also throughout the year. I have the opposite problem. I have a little less cash in June and so I've been using my credit card more. Ouch!

    I don't think GE is a bad stock at all. I like the price of entry and the yield is great. I think you made a decent purchase.

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  2. DP, Thanks for the comment. Because I'm in education the summer is an interesting combination for me. More time and less spending. So it's just a reminder to myself to be a little more measured during this time. It is good advice year round. But for me this is more of a summer issue. I don't think there is anything wrong with spreading my money around. But I would like to build some stronger positions.

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