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Beginners’ Portfolio: Vodafone Group plc Extends Its Domination

This article is the latest in a series that aims to help novice investors with the stock market. To enjoy past articles in the series, please visit our full archive.

The Beginners’ Portfolio is a virtual portfolio, which is run as if based on real money with all costs, spreads and dividends accounted for.

I took a look at the latest from Tesco recently, and it’s time now to catch up with Vodafone (LSE: VOD) (NASDAQ: VOD.US) and the rest of our portfolio. But before I do that, here’s how the valuation is looking as of 18 October…

Company Shares Buy price Total cost Bid price Proceeds Gain/loss %
Vodafone 289 168.5p £499.51 229.7p £653.83 £154.32 30.9%
Tesco 159 305.5p £498.23 367.8p £574.80 £76.57 15.4%
Glaxo 34 1,440.5p £502.22 1,579.5p £527.03 £24.81 4.9%
Persimmon 79 617.9p £500.55 1,222p £955.38 £454.83 90.9%
Blinkx 1,319 36.9p £499.68 147p £1,928.93 £1,429.25 286%
BP 112 434.5p £499.01 445.8p £489.30 -£9.71 -1.9%
Rio Tinto 16 3,048.4p £500.18 3,234p £507.44 £7.26 1.5%
BAE 146 332.3p £497.59 442.4p £635.90 £138.31 27.8%
Apple 2 $458.4 £605.98 $508.3 £617.88 £11.90 2.0%
Aviva 146 321.4p £499.71 438.7p £630.50 £132.79 26.7%
Dividends         £281.08 £281.08  
Total     £5,100.66   £7,802.08 £2,701.42 53.0%

Vodafone takeover

vodafoneThe big news from Vodafone concerns its takeover of Kabel Deutschland, which was completed on 14 October. The £6.5bn deal, which saw the Vodafone subsidiary Vodafone Vierte Verwaltungs take over Kabel Deutschland, has left Vodafone in control of 76.57% of the share capital.

What it means is that Vodafone can now start offering a broadband-inclusive package to Kabel Deutschland’s 15.3 million customers, with only around five million of that total currently taking the Kabel Deutschland broadband offering. And that puts Vodafone’s German presence on a more competitive footing now, against other providers who were already offering bundled services.

For the Beginners’ Portfolio, it’s good news, as Vodafone’s rise to global power is one of my key reasons for holding the shares. I think the strategy of going for majority stakes and being in control is exactly right.

In other news…

GlaxoSmithKlineGlaxoSmithKline (LSE: GSK) (NYSE: GSK.US) has made a minor disposal, of its thrombosis brands to The Aspen Group, as part of its strategy of focusing on products with maximum growth potential.

The pharmaceuticals giant also told us that its share buyback programme is to continue uninterrupted during the close period ahead of its third-quarter results, being managed by an independent third party. The Q3 figures should be with us on 23 October.

We’ve had a third-quarter update from BAE Systems (LSE: BA), telling us that its outlook remains unchanged from the time of its first-half results. There was one caution, that if the firm’s Salam contract pricing negotiations do not complete by the end of the year, 2013 earnings per share would drop by 6-7p — but a satisfactory completion is still anticipated.

Aviva has sold Aviva USA to Athene Holding for $2.6bn (£1.7bn), which is $0.8bn more than previously expected.

The U.S. Court of Appeals ruling limiting the extent of claims for possibly-fictitious damages has given BP a filip.

And the price of Blinkx shares has now nearly quadrupled, after the firm announced an expansion of its partnership with Zazoom to launch the blinkx Buzz channel.

Creeping up

And overall, the value of the portfolio is creeping up, which is nice.

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> Alan does not own any shares mentioned in this article. The Motley Fool has recommended shares in Vodafone and GlaxoSmithKline, and owns shares in Apple and Tesco.