Monday morning trades…. Dividend reinvestment and a punt on a retailer

I’m going to be a bit busy this week, so won’t have as much time to devote to the Amateur Investor website as I would like. I am only an Amateur Investor, so making a living sometimes gets in the way of spending time on other projects such as this one.

Anyway, the Dividends are coming in thick and fast at the moment, so reinvesting them to make them start working as soon as possible has been a priority.

So today I made 4 small purchases.

3 of the Monday purchases were additions of already held stocks – namely RSA, CSN (for yield) and PDG (speculative) – to reduce the average buying price of the shares. I won’t go into any more detail than that.

But the 4th purchase was a new addition to the Amateur Investor portfolio.

A few years ago I bought shares in Game Group (GMG), the High Street retailer of games consoles (such as the Xbox and the PS3), computer and video games and gaming accessories.

Back then I made a good profit quite quickly so I cashed in my holding to lock in the profit.

Since then I have watched from the sidelines as retailers have gone out of business, the likes of HMV have tread troubled waters, and the non-stop boom in Internet Shopping has taken its toll on the share price of “bricks and mortar” retailers.

Shares in GMG were around 80p in November 2010 and they’ve been on a steady downward trend since then, dropping below 20p recently. So is this another case of a retailer in trouble? The signs would say it’s likely. But I have a nagging desire to take a punt on them in the hope that the raft upcoming games releases and the the new Nintendo console might give the shops a shot in the arm.

They are currently yielding over 20% (due to the share price fall), surely the dividend will be cut to bring this yield back to a more realistic level? Surely, but if for some reason it isn’t then this could be the bargain of the Century!

And an article in The Sunday Times yesterday seemed positive, if I looked hard enough, saying “it’s not game over yet” (Sunday newspaper share tips can be found on ShareTips365).

So I dipped in and bought some shares in Game at an average buying price of 21.44p (including Stamp Duty).

So the last block of dividend re-investment goes on Game Group. Have I just thrown my money down the drain? Time will tell…

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>