Monthly Investing Recaps: July 2014

At the start of each month I detail all the buy/sell activity here for each of my 3 individual stock portfolios: Loyal3, Roth IRA, and Taxable Brokerage accounts. It’s just one way I am chronicling my journey to financial independence here at Starting From Zero.

In addition to these 3 accounts, I also continued investing in my Thrift Savings Plan (TSP) again this month. Right now I’m contributing 4% of my base pay but may adjust this in the future. The majority of my investing will still be in my taxable and Roth accounts. The TSP is basically a 401k plan for federal employees including the military. It only offers index funds but does have probably the lowest expense ratios around, even lower than Vanguard. Right now I’m putting my contributions in the C Fund which mirrors the S&P 500 and the S Fund which is a small cap index fund. Since these deposits typically take a while to reach my account, I won’t be detailing those transactions here.

Loyal3 Account

No activity this month.

 

Roth IRA

No activity this month as I maxed out my annual contribution limit for the year with last month’s purchase of Deere.

 

Taxable Brokerage

Buys

16 shares of Philip Morris International (PM) @ $82.96 per share.

Sells

None.

Quick Hits: With shares dipping recently after their latest earnings report, it gave me the chance to average down and increase my position in the global tobacco company. I originally initiated a small position (6 shares) last October. With shares trading at 16.1 times trailing 12 month earnings and 14.6 times forward earnings, I think PM presents good value at current levels. For comparison the stock’s 5 year average P/E stands at 15.7. With a 4.6% dividend yield and steady buyback program that has reduced shares outstanding from 2116 million in 2007 to 1591 million in 2014, there are a lot of things to like about this dividend challenger with 6 consecutive years of dividend increases.

Although the company has increased their debt load quite a bit in recent years, taking advantage of low interest rates to finance their large buyback program, I’m not too concerned right now. However this is a situation that I will monitor closely going forward. Even with the increased debt, PM still has a solid interest coverage ratio of 12.36 and carries an A- credit rating by Morningstar.

 

Full Disclosure: I am long DE and PM. This post is not intended to be a buy or sell recommendation for any stock mentioned and is intended for educational/entertainment purposes only.

How was your July for investing? What do you think of my stock picks this month? Share with a comment below and thank you for reading!

2 comments

    1. Yeah I went pretty conservative when coming up with my apartment expense budget just to cover myself and planned on using whatever was left over for stocks. Plus with PM’s shares dipping, I couldn’t pass up a chance to average down and add to this position which I’ve been wanting to do for a while.

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