Dividend Payouts, Apple (AAPL) Worries and Automatic Investment Plans

April has been mostly good for our portfolio.  

We got paid dividends twice in April.  First, Altria (MO) paid me $4.23 in dividends on April 9, 2012.  With my Dividend Reinvestment Plan, I was able to purchase 0.1358 shares of MO at $31.15.

Second, Kraft (KFT) paid me $3.36 in dividends on April 15, 2012.  Again, my Dividend Reinvestment Plan bought me 0.0900 shares of KFT at $37.33.

This may seem peanuts to the untrained eye but that's $7.59 of free money.  Plus, I got more shares of a company which can increase in value over time.  Besides, $7.59 will not pay my bills so it might as well work harder for us in the stock market.

On top of that, WM, MO and LULU have been pulling their weight with the appreciation of our portfolio.  Apple still owns the bulk of our growth but the Cupertino company has been beaten up these past few days.  Rumors of supply issues and that mobile carriers were sick of Apple plagued the stock price which  dropped to $560 from an all-time high of $644 (04/10/2012).  I'm not worried.  It's just some profit taking and rumor-mongering (although that patent infringement judgement against them can be an issue).

Now, I have some cash to spend and I'm looking to buy more shares to add in our portfolio.  

Currently, I'm looking at Xilinx Inc (XLNX) and Waste Management (WM).

XLNX looks tempting because of it's upcoming Ex-Dividend date (May 14, 2012 with a dividend date of June 5, 2012).  I also expect XLNX to increase their net profits due to the upcoming technology purchases by consumers (back to school/college CPU purchases for example) in the near future.  Intel has also launched their IVY Bridge chips which would spur a new line of products that would come from Xilinx and it's competitors.

However, the trend of XLNX and the possible competitive arms-race may not bode well for my stock position.  Also, Wall Street's estimates does not give me confidence either.  In addition, if I buy more XLNX, my asset allocation would be heavy on Tech ahead of the summer Tech Sector slow down.  Furthermore, the PEG ratio of 4.89 would suggest XLNX would be an expensive stock to buy (AAPL is at 0.66 - my cheapest stock purchase).

Given my concerns and with Analysts' HOLD recommendation, I would seriously reconsider my plan of buying more XLNX.

On the other hand, WM has been showing better news than XLNX.

WM has seen profits grow at the average of 1.2% year-over-year.  WM has managed to capture the methane gas from their landfills and transformed it into energy for their trucks and possibly households.  Also, WM has E-Waste recycling services contracts with electronic companies such as Sony.  I've been an environmentalist even before being "Green" became cool and this news caught my attention and made me feel better with my investment. Besides, worse case scenario, people would still need WM to get rid our their trash... a sustainable business if you ask me.  Furthermore, I'm a bit underweight with my WM position (Business Services Sector at 5.83%) at $187.99 (4.6% of total portfolio).

So perhaps, I'll use the $525.00 dollars I have in cash to buy some WM...  or perhaps split it with some Energy Transfer Partners ETP as part of my Natural Gas/Greener Fuel play.

All right, I have decided:

ETP = $200 - $4 fee = $196/$47.72 as of 04/24/12 1:15pm = 4.1072 shares

WM = $225 - $4 fee = $221/$35.98 as of 04/24/12 1:15pm = 6.1423 shares

I'll leave the $100 cash in the sidelines and wait for more opportunities to get in the stock market.

Update: I've decided the use the $100 to get as much XLNX as possible.

XLNX = $100 - 44 fee = $96/$36.67 as of 04/27/12 9:38am = 2.6179 shares

Aside from the upcoming dividend payout, something tells me that XLNX will be key yo the increase of data use by smartphone users.  Especially the 4G LTE group...  perhaps, a new 4G phone from a Cupertino company?

The Automatic Investment Plan will execute on May 1, 2012.

Let us wait and see.

Automatic Investment Plan Confirmed

Today, my new Automatic Investment Plan kicked in.

I got 2.1473 shares of Apple (AAPL) at $347.42 per share.

Analyst predict AAPL will go up to at least $400 in the next 18 months.  Watching the charts, this statement is not too far fetched.  Plus, with WWDC 2011 just around the corner, AAPL is poised to release their new Mac OSX version (Lion) and people still hope for a new iPhone 5.  Even if the iPhone 5 does come out in the fall (per rumor mills), AAPL is all but guaranteed to have record sales for 2011 because of the iPad 2, new iMacs, Mac OSX Lion and the iPhone 5 (with some push for the iPods in September).  Also, this weekend marked the first time AAPL beat Google (GOOG) as the world's most valuable brand.  AAPL is kinda down today... most likely from profit takers or mutual funds re-balancing their positions (Like the NASDAQ index).

I got 1.3806 shares of Lululemon (LULU) at $98.51 per share.

Currently, LULU is a bit higher than when I placed my order.Roughly 2-3 points down from the Day's high.  I still believe LULU has some room to run leading to the impending 2-1 stock split in June.  It is also not too far fetched that LULU will be the next Chipotle or Netflix.  High quality brands and room to grow in the US, Europe and Asia.

I got 2.9717 share of Xilinx Inc (XLNX) at $35.67 per share.

I bought some more XLNX ahead of it's X-Dividend date of May 16.  If I had more cash, I'll buy some more.. I'm practically getting paid to buy the stock.  I'll probably lock in some earning or re balance after I get the dividend reinvestment.

With this action, I'm a bit overweight in the Tech Sector.  This is a no no.. but in this case, I think I can ride out the imbalance because of two impending events with my 2 Tech positions.  Apple's WWDC and iPhone 5 and XLNX's X-dividend date.

I'll reconsider my positions as soon as these events pass.

Getting In on APPLE (AAPL)

The market has been down lately... especially on Tech Stocks.

Today, AAPL closed 15.33 down off it's 52-week high. Over 4% drop from the high and from today's range, almost broke the 5% pullback.

I think it's time to get in on AAPL.

Here's why:
1. Close to 5% pullback.
2. WWDC 2011 is coming up in June where Apple is expected to release it's new OS (Mac OSX Lion).  Also, the iPhone 5 might make an appearance (although highly doubtful per analysts and sources close to the matter).
3. A version of the iMac just came out with 2 Thunderbolt ports.
4. The white iPhone 4 finally came out and on WWDC, Apple would probably announce how much white iPhone 4's they sold.
5. RIMM is bringing Black Berry Messenger (BBM) to Android and iOS. This might convince BB users to finally switch to iOS or Android.  Either way, AAPL will have a greater profit margin since they control hardware and software distribution of the iOS devices.
6. Analysts and project AAPL to reach $400 in the next few months.

Therefore, I took $1000.00 from my reserves (which I will not do often) and put in my new Automatic Investment  Plan (to be executed on Tuesday, May 10).  I put in $750 for AAPL which would buy me 2.13 shares (@$350/share + $4 fee).  The $140 will be used to buy LULU that would fetch me 1.44 shares (@$94/share + $4 fee).  LULU is down 9.33% off it's 52-week high of $102.83.  A great way to buy some more LULU ahead of it's expected 2 for 1 stock split and Annual Stockholder's Meeting.  Finally, I allocated $110 to buy 2.94 shares of XLNX (@$36/share + $4 fee).  XLNX has bee rebounding lately and the X-Dividend date is coming up (May 16).  Might as well get those juicy dividends.

I know with my AAPL purchase, I may have 2 tech stocks and would unbalance my diversification.  However, with XLNX rebounding and the dividend distribution coming up, it makes good sense to keep XLNX and AAPL is also a great long term investment.

I will review my opinion of XLNX after the dividend distribution and earnings call.

New Rules

My Automatic Investment Plan just Posted.

Here's a summary of the transaction:
04/12/2011 - Transaction History - Buy
Ticker             Price/ Principal Amount               Fee                     Total
GLD              $141.08/ $146.00                    $4.00                     $150.00  (GLD Closed at $141.61 - Good!)
XLNX           $30.69/ $36.00                        $4.00                     $40.00    (XLNX Closed at $30.64 - Down)
WM              $37.75/ $76.00                        $4.00                     $80.00    (WM Closed at $37.67 - Down)

So I learned that Sharebuilder will collection commissions (fees) within the investment amount I put in for each position.  Basically, I could have invested my $300 and the fees would have been included within the $300 investment rather than getting charged the fee after.  This is good for those who are a bit cash strapped.  However, the $4 per investment could have bought some more "mini" shares of my stock positions.

Anyway, I just have to put in some NEW RULES for our Investment Strategy:

1. I will always keep 10% of my portfolio in CASH.  The reason is to have some cash on hand to catch bargain stocks and have some liquid cash for other purposes.

2. I will have ONLY 10% of my portfolio in Gold (GLD).  Gold is just a hedge for me. I do not plan to get rich off gold.

3. Each position will ONLY cover 20-25% of my portfolio.  This is to keep my diversity and spread out my risk across my portfolio.

Week Summary April 4 - April 8

Total Stock Positions: 3 (LULU, XLNX and ETP)
Total Money Invested: $0 (This week)
Total Fees Paid: $0 (This week)
Cash on sidelines: $13.01


Total Portfolio Value as of 04/08/2011 = $221.64 (as of 9:53 am PST)

YTD
Money Invested: $207.14
Fees Paid: $29.85

Week Summary March 28-April 1

Total Stock Positions: 3 (LULU, XLNX and ETP)
Total Money Invested: $207.14 (Including $50 bonus)
Total Fees Paid: $29.85 ($9.95 x 3)
Cash on sidelines: $13.01

Total Portfolio Value as of 04/01/2011 = $218.68

YTD
Money Invested: $207.14
Fees Paid: $29.85