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Portfolio Update: New Addition (CSX and NSC; September 28, 2012)

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To say that railroads have been on my mind a lot lately would be an understatement. Just like when I play monopoly, my strategy for success is to ride the rails! Perhaps I’m getting a little too carried away, but at these low valuations, it’s been very hard to resist.

So, I gave in again today and added 60 shares of CSX Corporation (CSX) at $20.70/share. CSX was my first railroad stock, which I started back in March at roughly the same purchase price. I am pleased to have been able to add more shares at this attractive price point again. CSX has increased its dividend at a growth rate of over 25% in the past 5 years.

I wasn’t done. I also added to my Norfolk Southern (NSC) position, purchasing 20 shares at $63.70/share. I initiated a position with NSC just last week at a pricepoint of $67.41/share. Even at that time, I thought I was getting a bargain.

NSC has continued to slide further down, so I used today as an opportunity to dollar cost average down. The last time NSC hovered around $63.50 was back in June. I had this stock on my watchlist at the time, and was waiting for it to dip just a bit more. It never did, and the next thing I knew, it shot up to over $70. I didn’t want to miss this chance again, so decided to load up instead.

Factoring in these two new purchases, I’ve now made six transactions (EXC, EXC, NSC, INTC, CSX, NSC) in the month of September. I made zero in August. But still, even after going on a shopping spree this month, I am still finding some attractive valuations in the market. CAT and CMI are two in particular that I will continue to watch with interest. Just a little bit further, and I’m sure I’ll strike again.

 

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{ 11 comments… add one }
  • AllaboutinterestNo Gravatar September 28, 2012, 8:18 pm

    Wow, you did go on a shopping spree. You made some great buys. It is hard to resist when you find a good sale and can lower your cost basis.

    I actually picked up more NSC and initiated a position in CAT recently. I also own a little EXC in my income portfolio. I will have to take a bigger look at CSX. I do like the railroad stocks and will be watching to add more shares on further weakness. Take care!

    • FI FighterNo Gravatar September 29, 2012, 10:01 pm

      Allaboutinterest,

      Yes, I had trouble resisting the temptation of good deals this past month. You may very well have further opportunities to add to railroads, as they are still very attractively priced (as of market closing on Friday).

      Great pickups you have there in NSC and CAT. Those are still high on my watchlist going into October.

      Cheers!

  • Dividend MantraNo Gravatar September 29, 2012, 11:15 am

    Big shopping spree there! Nice going. Your portfolio is going to thank you by providing you larger and growing dividends. That’s all the thanks you need!

    I’ll be ready for some more purchases early next month. I agree with you that the stocks you purchased look great (except EXC, I don’t follow) and now big industrial stocks like CAT are becoming more attractive. I’d say that some of the bigger values right now can be found in industrials and tech firms. Much less value in the consumer and telco stocks (except VOD) as they’ve had a run.

    Always fun to hunt for the values!

    Best wishes.

    • FI FighterNo Gravatar September 29, 2012, 10:25 pm

      DM,

      Sometimes you just have to splurge a bit to enjoy life 😉

      All kidding aside, my portfolio did see a bit more activity than usual in September. Hopefully these moves will pan out and become solid long term plays. In the meantime, yes, I very much look forward to the increased dividend payouts!

      EXC is a bit of a wildcard in the portfolio. The dividend growth has been non-existent for a few years, so I can see why many dividend investors would prefer to invest elsewhere. Given the current valuation of most utilities, I feel like EXC is attractively priced, and a strong value play for the future. While I wait for the price and dividend growth to bounce back, I’ll happily collect the dividend.

      I agree, the industrials are looking very attractive. Tech stocks also had a few large dips this past week as well. Since I added INTC, I’ll probably focus more on the industrials moving forward. Though I will look to add more INTC if it reaches the $20-$22 range. Which industrials, tech stocks are you looking at?

      Telecom stocks have indeed had a fabulous run this year. I added some VOD early in the year, and would also like to eventually add some T. You’re right, consumers have also been on a tear lately. I’m hopeful we will have better opportunities to add to these sectors in the future. In the meantime, the value seems to lie in industrials, tech, and railroads.

      Happy hunting!

  • Jonathan CurryNo Gravatar September 29, 2012, 3:26 pm

    I was actually looking at either starting a position in CSX to diversify my new NSC position or adding to my NSC position this past Friday. Looks like you beat me to it.

    • FI FighterNo Gravatar September 29, 2012, 10:32 pm

      Jonathan,

      Looks like we are on the same page there with CSX and NSC! At these prices, I don’t think you can go wrong with either one. I had some trouble deciding on which one to invest in last week, so rather than having to make the difficult decision of choosing one over the other, I opted to buy both.

      Hopefully you’ll have some more opportunities to add CSX next week.

      Best wishes!

  • SB @ One Cent at a TimeNo Gravatar September 29, 2012, 7:57 pm

    how much of your portfolio is in rail road?

    • FI FighterNo Gravatar September 29, 2012, 10:38 pm

      SB,

      My allocation in railroads is currently around 14%. Since this is only my first year building the portfolio, I’m still in accumulation mode. I haven’t placed much emphasis on trying to allocate to a set target, knowing that there are still many companies/sectors I would like to add to in the future. Rather, I am purely focused on just adding quality companies at attractive prices. I’m sure the 14% will drop accordingly, as the portfolio starts to mold into the proper shape.

      Cheers!

  • Compounding IncomeNo Gravatar October 1, 2012, 2:52 am

    If you’re going to buy them, buy them while they’re on sale. Works for both shopping and investing.

    • FI FighterNo Gravatar October 1, 2012, 6:27 pm

      CI,

      Agreed! Doesn’t make sense to pay full price, or retail when we know it’s only a matter of time before the season changes and the inventory gets discounted.

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