Latest Buy — Target
On 4/6/2017, I purchased an additional 75 shares of TGT in my standard brokerage account. I own about 75 shares in my Roth IRA so this was a new purchase in my taxable account. I eventually hope to get this amount to over 100 shares so I can sell call options on it. I also sold a put option on TGT expiring in May at a strike price of $50 to get some additional income. If TGT drops to $50, I’d be very happy to buy 100 more shares at $50/share.
The cost basis of TGT in my Roth is 65.16 so a purchase price of 53.88 significantly helps. This investment also adds an additional $180 in annual dividends. With this purchase I’m up to $6,833.87 in forward 12-month dividends.
Although I was going to be purchasing more TGT regardless, this article, Why Target (TGT) is a Buy, from one of my favorite investment guys, Frank Curzio, sealed the deal.
Thanks for the update on your TGT investment. It always feels nice to lower your cost basis.
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Thanks, Jay! Yep. I’m hoping to lower my cost basis even more by selling calls.
Two I –
Making that massive position I see! Creating/selling options on your stake will surely help. I really think Target is trying to fix/improve their downfalls vs. Walmart & Amazon, and their quality/experience should make them stick out.
I agree. Target is making some changes to better compete. The market and Wall Street really don’t like them right now which gives value-mindede investors a good entry point or a point that they can lower their cost basis.
Fantastic Buy. Will be interesting to see their next few years with the dominance of Amazon and other stores. Can Target keep this dividend increasing? Cheers
Thanks, Buy, Hold Long,
I’m not sure if it will keep increasing at the pace it has been, but the dividend is more than easily covered by free cash flow at this point. I use Amazon a ton but still find myself in Targets fairly often for the stuff I need right away. The stores near me are always quite busy.
There are some worries that boycott of Target had a lot bigger impact on revenues than expected. What do you think about it and do you rather see it as a great opportunity long term or long term worries?
The boycotts likely had some impact, but I’m not sure how much. And any major impact is likely done by now. I think the short-term problems pose a great buying opportunity. Target isn’t going anywhere and I’m investing for the long term.
Nice buy and it adds a substantial amount of dividends for you with its high yield. Smart to strike now and lower your overall cost basis by so much. Cheers.
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Thanks! Heck, I might even buy more at these levels provided my put at a strike price of 50 doesn’t get assigned.
Very nice buy Two Investing – Big fan of Target and own a pretty large position myself. Way to keep building your position here and take advantage of the downturn.
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Hi Bert. Comments from both the Diplomats! I like it!! Hoping Target stays down for a bit longer too so that the 4% dividend can buy me more even more shares as I DRIP it.
I’m not so certain on retailers in general. I think a lot of retailers are being pressured by Amazon, and over the long run they’ll have trouble competing.
We’ll see. Retailers are definitely getting pressured by Amazon and I think they will need to rethink a lot of their strategies that worked in the past. But, I’m willing to wait and collect my 4%+ dividend while they make any necessary changes. I thought Best Buy was going the way of RadioShack, but they revamped their stores and seem to be doing quite well now. I’ve had plenty of times where I brought in the Amazon price and Best Buy either matched it without any questions or even beat it already. Despite how fast Amazon shipping has become, there’s still something nice about getting your order immediately in the store.
Target definitely needs to work on their online presence though. I can’t remember the last time I went to target.com and bought anything. Amazon is so ubiquitous that I even use them to read reviews of products if I end up buying it from a retail site.
Thanks for the comment!