Portfolio Update: New Additions (CVX and SDRL; June 01, 2012)

It was another bad (*good!) week, as the market continues to show further weakness. With concerns over Eurozone still at large, an uninspiring jobs report back home, and just a slew of other problems across the board, the general trend is – down, down, down. The S&P 500 is down ~10% in just a month’s time! How much further do we have to go, and is now an opportune time to load up on discounted stocks?

I logged into my Watchlist on Friday morning, took a look around, and decided now was a good time to add to a few positions. Although my portfolio is somewhat overloaded in allocation to energy and oil, I wanted to dollar-cost average down on a few positions. Since this is only my first year starting dividend investing, I am not yet worried about diversifying/balancing the portfolio; I figure this will sort itself out over the years. I simply want to invest in quality companies at attractive prices.

I bought 14 shares of Chevron (CVX) at a price of $96.92/share. I previously owned 25 shares, so this brings the total up to 39 shares. Chevron is a company I feel very comfortable owning and making a core holding in my portfolio. If the price decreases further and encroaches the $90 range, I will likely load up and buy even more. The current yield is a respectable 3.73%.

I also purchased 33 shares of Seadrill (SDRL) at a price of $32.21/share. I previously owned 40.836 shares, so this brings the total up to 73.836 shares. Seadrill is a higher risk holding of mine, but it has come down quite a bit since reaching a peak of over $40 as recently as this past March. Seadrill is the world’s largest offshore drilling company as measured by market cap. It is a highly leveraged company that has assembled a state-of-the-art drilling fleet. The large debt may be a concern, but should be tolerable as long as demand remains high, and dayrates for its ultra-deep water rigs continue to command a premium. The dividend is currently yielding at an astounding 10.19%!

Here is an article on Forbes hinting that Seadrill is now oversold:

Shares of SDRL Now Oversold

*’Good’ only as it pertains to potential investment opportunities

 

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