It’s been a long time since I made three separate tranches of buys in one month but when individual opportunities come up for a variety reasons it can be too hard to pass up seemingly “good” deals especially in a market that hosts too many great stocks that are still overpriced. With that being said I decided to nibble on a dividend stalwart that was now trading at a historically high yield and a price that seemed too good to ignore. Sticking with my May stock considerations:
I have added to my taxable account 20.0 shares at $33.12 for a total investment of $662.40 in Hormel Foods Corporation (HRL). With this recent purchase my taxable account holdings in HRL now totals 34.4360 shares with a market value of $1,140.52. This was a free trade.
With only a couple days left in May I have a feeling this will be my last buy for the month unless we see another major downturn similar to what we saw a couple weeks ago.
Going forward, I still like HRL a lot long term. I feel the company, despite all the negative headlines and current near term headwinds, can deliver nice returns and more importantly a growing dividend for the foreseeable future. The company, much like McDonald’s Corporation (MCD), General Mills, Inc. (GIS) and others are pivoting towards a fresh, natural and/or organic fare. It wasn’t more than a couple years ago that MCD was totally written off by all the financial talking heads and experts stating that MCD was a relic of of the past that could not compete against the likes of the newer, fresher restaurant offerings of Panera Bread Company (PNRA) or Chipotle Mexican Grill, Inc. (CMG). Of course, today we see MCD making new all time highs seemingly every week. The MCD example just highlights how it’s often best to buy companies when they are in the midst of a current struggle. Buying when others shun a company, especially a long term well known brand, can be the best time to initiate or add to a position. Remember Starbucks Corporation (SBUX) back in 2008 before the return of Howard Schultz? SBUX was a company struggling at the time with a questionable menu, too many U.S. stores and other headwinds. We all know how the company has performed since 2008.
Similarly, I’m not one to discount the moves HRL is making towards the healthy, organic and fresh sector with its acquisitions of Applegate: Natural and Organic Meat, Justin’s: Natural and Organic Nut Butters, Muscle Milk: Protein Shakes and JENNIE-O® Turkey and other natural and organic food makers in recent years. GIS buying companies like Annie’s, Lärabar, Cascadian Farm among others is another example.
While HRL is often synonymous with SPAM and other processed meats, a category not known to be the most popular these days, it’s still pivoting towards changing consumer tastes and offers a sustainable dividend which is what I covet most with any purchase I make.
What do you think about my recent purchase? Have you been buying stocks after big price swoons? Please let me know below.
Disclosure: Long GIS, HRL, MCD