Off and on, over the years, I run back to Philip Morris and stick shares of them in my trade account. My shares of MO that have been running with the DRIP I have never touched or even really thought about selling. But the shares that occasionally show up in my trade account are just that, trading shares of MO. Like Linus’ blanket I tend to hold Philip Morris shares when I have cash and I am unsure what to invest it in. The comfort comes from having followed MO, through good and bad, for over 15 years. Well that and the nice dividend that seems to have the consistency of time itself.
So two days ago, after having cut half of my CROX loose, I went running back to Big MO. $85.50 seemed like an ok price to pay with the spin-off coming the end of next month. In the coming months I look for MO shares to gain relatively quick after the spin. Announcements of a big dividend raise, increase in share buyback or the international part being spun-off too could all help propel MO shares higher post split. At least I hope some of this stuff happens and the shares go up.
The shares of Kraft I get next month are the great unknown. They are in the middle of trying to right the ship and most anything is likely to happen post-spin. They could make headway in improving the businesses, sell some stuff, buy some stuff, who knows. So the plan as of right now is to wait and see. Unless something really bad happens or gets announced I look to hold the KFT shares for at least 3 months. Now if the shares run up 20% or more a month after the spin then all bets are off.
Another factor in how long I may hold either MO or KFT post-spin is how well my CROX are doing. CROX have had it a little rough since earnings release. I have them off margin so will sit with them a bit and see. I’ll let you know how it all works out.
Do you have a comfort stock that you keep running back to?
That’s it for today. Here’s to security blankets, consistent dividends and to keeping an eye on your EveryDay Money.
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