We look at recent news affecting our portfolio.
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.
Interim results from Vodafone (LSE: VOD) on 13 November disappointed the market, and the share price fell 4% on the day. Performance was "slightly below" expectations, with group revenues down 7% to £21.8 billion, though full-year profits towards the upper end of previous expectations are still forecast.
There were two major exceptional items -- a £5.9 billion write-down relating to business in Spain and Italy, and a £2.4 billion dividend due from Verizon Wireless (NYSE: VN.US), which is to be used for a share buyback.
What of Vodafone's dividend? The interim payout was lifted by 7.2% to 3.27p, and the company reiterated its commitment to a full-year rise of at least 7%. That would give us a payout of at least 10.2p per share, for a minimum yield of 6.5% on the current 158p share price -- which is down on our purchase price of 168.5p.
Our small-cap growth candidate, the video technologist Blinkx (LSE: BLNX) released interim results on 14 November, and they looked pretty solid. It's still very early days for both the company and its technology, but seeing revenues rise by 84% to $82m with adjusted pre-tax profit up nearly 70% to $8.4m was pleasing.
What was described by chief executive S. Brian Mukherjee as an "exceptional half" was partly due to the company getting its latest products integrated and in full service ahead of schedule. The long-term value of an investment in Blinkx depends on the future of targeted video advertising, and I really can't see that as anything but healthy. The share price, at 66.6p, is nicely up on our 36.9p purchase price.
Persimmon (LSE: PSN) shares fell a little after the housebuilder released a trading update on 13 November, though they have recovered to reach 774p today -- down on their recent peak, but still comfortably up on our purchase price of 617.9p.
There was little to excite or disappoint in the update, which essentially just told us that everything is going in line with expectations. We should get a further update on 8 January, after the company's year end.
The big news from BP (LSE: BP) has been the settlement with the US government of all criminal charges related to the Deepwater Horizon disaster, including all claims by the Securities and Exchange Commission (SEC). The total comes to around $5 billion, which is certainly a hefty sum. But it could have been worse, and at least we can now quantify another portion of the total damage.
At 435p today, the BP share price is almost exactly unchanged from our purchase price of 434.5p.
BAE Systems (LSE: BA) announced the acquisition of US firm Marine Hydraulics International, which operates a shipyard in Norfolk, Virginia, for the sum of $69 million. Marine Hydraulics' ship repair facilities support the US Navy and other customers, and will become part of BAE's ship repair business.
BAE has also settled a contract dispute with the government of the Republic of Trinidad and Tobago.
BAE's share price, at 311p, is disappointingly down on our 332.3p purchase price, though it is up a bit on the 305.4p it had fallen to at the time of our last portfolio valuation.
There's been no specific news of Rio Tinto (LSE: RIO), but I thought it worth noting that the company still suffers from the general malaise affecting the mining industry, with its shares having falling a bit further, to 3,016.5p -- our purchase price was 3,048.4p.
The lesson for those investing in depressed sectors is that it is pretty much impossible to pick the bottom, and getting in at a good-value price is what counts. On a forward price-to-earnings (P/E) ratio of 9 based on current forecasts for this year, falling to 8 next year, I'm still happy we're sitting on a long-term bargain.
After a recent discussion board question about valuations of the companies on our watchlist, and what constitutes a low P/E etc, next time I'll offer a few word on my approach to such things. P/E is a very rough measure, and I won't be going into any deep analysis -- I'll be keeping it simple, which I really do think is the way beginners should approach things.
You can find the dedicated discussion board for the Beginners' Portfolio here. Hopefully, it will prove to be a useful forum for general discussions, which are hard to carry from article to article.
We also have some other resources that I would recommend to any beginner following this portfolio. In particular, the following two Motley Fool reports are specifically useful for beginners:
The "What Every New Investor Needs To Know" report is key -- it's concise and pretty easy going. It covers some things that early articles in this series looked at, but with a slightly different perspective. Do click here for a free copy.
And you should get a copy of "10 Steps To Making A Million In The Market". It's motivational, and shows that it really is plausible to make a significant pile of cash by investing in shares for the long term.
Many people think the idea of making a million is just a pipedream. If you think that, click here for a copy and see if it changes your mind -- it will cost you nothing.
> Alan does not own any shares mentioned in this article. The Motley Fool has recommended shares in Vodafone.