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Finding Buying Opportunities #2: Analyzing My Altria / Philip Morris Moves

12 June 2008 One Comment

I received such a great response regarding my previous post on analyzing my Apple (AAPL) trades, that I decided to write a similar post. This post, however, is on a much differently behaving stock(s) when compared to Apple. Apple is a very volatile stock compared to the relatively calm stock movements of Altria (MO) and Philip Morris (PM).

If you aren’t sure why I’m referring to two stocks, Altria recently spun off Philip Morris International. Therefore, most of my trades were for Altria (MO). Owners of Altria now hold shares in both Altria and Philip Morris Int’l.

Okay, enough talk, let’s look at how I built my position over the last few years.

As I mentioned above, Altria spun off Philip Morris International.  Also of importance is that before that, Altria spun off a major stake in Kraft (KFT).  Both of these spin offs are detailed in the below trades.

Trades Since 11/25/05:

  • 11/25/05: Bought 50 shares of MO at $73.40
  • 1/4/06: Bought 15 shares of MO at $75.25
  • 2/3/06: Bought 14 shares of MO at $71.60
  • 2/21/06: Bought 21 shares of MO at $72.59
  • 4/6/06: Sold 20 shares of MO at $70.50
  • 10/11/06: Bought 40 shares of MO at $78.11
  • 2/8/07: Bought 25 shares of MO at $85.15
  • 4/2/07: Received 103 shares of KFT in spin off
  • 4/2/07: Sold 103 shares of KFT
  • 4/2/07: Bought 51 shares of MO at $67.47
  • 2/11/08: Bought 25 shares of MO at $72.37
  • 3/3/08: Received 233 shares of PM
  • 6/5/08: Bought 35 shares of PM at $52.02

Summary of Trading Activity:

As you can see with the exception of a single sell action in 2006, I have been consistently building my position in Altria.  Even after the spin off of Kraft, I immediately sold my KFT shares and rolled the money into more Altria shares.  Why?  My target has been the eventual spin off of Philip Morris International.

With the above trades, I have $15,035.28 invested in this position.  The result has been (with dividends reinvested) 233 Altria shares and 268 PM shares.  The current value of this position is as follows:

  • 233 Altria (MO) shares at $20.72 is worth $4,827.76
  • 268 Philip Morris Int’l (PM) shares at $49.86 is worth $13,362.48

Overall, it has been just over a 17% return.  Not bad.  Not that great.  However, the current share price has experienced a quick drop of close to 8% in the last few days, which is reflected in the return.

My Future Moves

There is a good chance that I decide to unload part of my Altria position and roll the money into just Philip Morris.  Check out my other posts on PM to see why I like the company so much.

Conclusions

If you look at my “Finding Buying Opportunities” analysis of my Apple trades, you’ll see how different Altria/PM is when compared to building a position in Apple.  It is good to see the difference in how these stocks move.

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