Yesterday, I used a chunk of the money I received from my Car Sale to increase my holding in GSK.
Back in November, GSK was my first purchase using the Dividend Growth Investing strategy. The price started to increase over the months I purchased them back in November 2013, but over the last few months they've received some bad press with allegations of bribery and international sales have dropped as a result. Claims have been reported in China, Jordan, Lebanon, Poland and Iraq and unsurprisingly the share price has taken a significant drop. This put GSK back on my radar as the share price was within 10% of the 52 week low. I had a lovely 10 day break from work last week and as you readers might have seen, I bought shares in BAE Systems plc and was keeping an eye on the share price of both GSK and Tesco during the day as I had the luxury of being home and having constant viability of the share price.
This was the first time I've spent a good chunk of the day staring at a share price and boy it's addictive. The share price would fluctuate between 0.5% - 2% in hours. So, as a super-smart person, I thought I would wait until it's low and then purchase the stock......simple right! Well, I made my first 'school boy error' and forgot that on Bank Holiday Friday the stock market is closed. I was going to purchase them on Thursday or Friday, and the price on Thursday was a little bit higher than it had been a couple of days before (I got greedy!), so I waited. We also had a Bank Holiday on the Monday, so I was then planning on buying GSK on Tuesday/Wednesday. When it came to Tuesday lunch time, I noticed that GSK had made a deal with Swiss drug-producers - Novartis. They announced that shareholders would receive a £4bn capital return! Following the news the share price shot up over 5%. BUGGER!!!! I wish I had acted on my hunch last week and got the stock 5% cheaper but you live and learn!
Anyways, I decided to buy the stock as it was only 7% off it's 52 week low, and they were still a good value option compared to the other shares on my watchlist.
I've also made a decision not to watch stock as intensely as I did last week. It was quite exciting, but in both cases for GSK and Tesco I missed out on lower prices. I was waiting to see if the share price would drop more with the time that I had off from work....and it didn't. In future, I'm going to set a marker for myself and if they cross it, I'm just gonna buy it!
Here are the details of the purchase:
I bought 66 shares at 1644.895p, with charges included it cost me £1,103.01.
GSK's yield was 4.8% for 2013, and they've averaged a 4.98% yield over the last 5 years.
The dividend grew 5.41% in 2013 and they've averaged a 6.48% growth rate over the last 5 years.
They had 1.44 dividend cover for 2013 and they averaged a dividend cover of 1.48 over the last 5 years.
Have any of you fallen into the trap of watching stock for hours/days before acting? Have you made a 'school boy error' and forgotten about closing times? Have you made any purchases this month?
Labels: Stock Purchase
