Monday, August 29, 2016

Recent Sell: Digital Realty Trust, Inc


In July I celebrated adding 3 more home runs to DivGro. One of those home runs were Digital Realty Trust, Inc (DLR), a publicly-traded U.S. real estate investment trusts (REITs) that owns, acquires, repositions and manages technology-related real estate.

DLR's performance has been spectacular. The share price more than doubled from my buy price, though lately the REIT has pulled back to a just under $100 per share. DLR now yields 3.54%, much less than my initial yield on cost (YoC) of 6.30%. While DLR has paid and increased its dividend for 12 years running, dividend growth has slowed in recent years.

It is hard to say goodbye to a winner, so I'll just say good buy and move along!

bought 48 shares of DLR in April 2014 at $52.73 per share. DLR officially became a home run stock on 28 June 2016 when shares closed at $106.64. Here is the 3-year price history chart of DLR that I created when DRL became a home run stock:

The reason I'm including this chart again is so readers can compare it with the one below showing my buy and sell prices. It is clear that DLR's stock price started to slide recently and I decided to get out while the getting out was good:


I still like DLR, but as most readers know, I'm preparing DivGro for options trading. This preparation involves closing several positions to allow me to increase the number of shares in the positions I plan to retain and target for options trades.

DLR is one of the best performers I've sacrificed so far and I may just sacrifice a few more in the next few weeks...

Trading Summary

2014-04-24
 Bought 48 shares of DLR at $52.73 per share:
 $
2,531.00
2014-06-30
 Cash dividend on 48 shares:
$
39.84
2014-09-30
 Cash dividend on 48 shares:
 $
39.84
2015-01-15
 Cash dividend on 48 shares:
$
39.84
2015-03-31
 Cash dividend on 48 shares:
 $
40.80
2015-06-30
 Cash dividend on 48 shares:
$
40.80
2015-09-30
Cash dividend on 48 shares:
 $
40.80
2016-01-15
 Cash dividend on 48 shares:
$
40.80
2016-03-31
 Cash dividend on 48 shares:
 $
42.24
2016-06-30
 Cash dividend on 48 shares:
 $
42.24
2016-08-26
  Sold 48  shares of  DLR at $99.24 per share:
$
4,763.42
Capital gain:
$
2232.42

Dividends received:
$
367.20

Commissions/fees/taxes:
$
0.00

Net gain:
$
2,599.62

The net gain is 102.71% on the original amount invested, or 44% annualized.

Closing my DLR position removed $168.96 from DivGro's projected annual dividend income (PADI), which now totals $10,763.

Thanks for reading! What do you think of my selling DLR at this level? Do you own DLR?

7 comments :

  1. Kudos to you for selling a winner. Like you said, its not easy to do that when you are seeing good returns over the course of a few years. Looks like you are booking in some great profits.

    Congrats
    R2R

    ReplyDelete
    Replies
    1. Thanks R2R -- I'm very happy with DLR's returns (who wouldn't be with a 44% annualized return!?). Seeing the relatively out of character price drop since July, I decided to close the position. As mentioned, my main motivation is consolidation for options trading.

      Delete
  2. Nicely done. I think you will not regret exploring the options for income space.

    ReplyDelete
    Replies
    1. I'm certainly hoping that my options adventures will be successful! Thanks for reading and commenting!

      Delete
  3. Great buy and sell. The charts tell the story. Are you going to buy another stock with your money or use it to fund options?

    ReplyDelete
    Replies
    1. You already answered my question in the post. Good luck with options.

      Delete
    2. Hi Investment Hunting!

      Thanks for visiting and commenting -- I'm selling to consolidate. I'll use the funds to buy more shares of certain stocks in my portfolio, boosting the number of shares to at least 100 so I can execute options trades.

      Cheers
      FerdiS

      Delete

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