Beginners Portfolio: Disappointment From BAE Systems plc, Cash From Apple Inc.

Results from BAE Systems plc (LON: BA) fall short, but Apple Inc. (NASDAQ: AAPL) keeps paying out.

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

We’ve had news from a handful of Beginners’ Portfolio shares recently, but before I review it, it’s about time we checked on the valuation of the portfolio — especially as we have some new shares in it now.

I’ve reinvested the cash from the sale of Vodafone together with accumulated dividends, and it went two ways. First, I topped up our holding of Rio Tinto, and then I plumped for Barclays with the rest. Here’s what the portfolio is looking like now:

Company Shares Buy Cost Bid Value Change %
Tesco 159 305.5p £498.23 322.4p £502.62 £4.39 +0.9%
Glaxo 34 1,440.5p £502.22 1,678.0p £560.42 £58.30 +11.6%
Persimmon 79 617.9p £500.55 1,433.0p £1,122.07 £651.52 +124.2%
Blinkx 1,319 36.9p £499.68 111.0p £1,454.09 £954.41 +191.0%
BP 112 434.5p £499.01 507.9p £558.85 £59.84 +12.0%
Rio Tinto* 16 3,048.4p £500.18 3,430.0p £538.80 £38.62 +7.7%
Rio Tinto* 15 3,223.0p £495.87 3,430.0p £504.50 £8.63 +1.7%
BAE 146 332.3p £497.59 402.6p £577.80 £80.21 +16.1%
Apple 2 $458.40 £605.98 $522.00 £607.65 £1.67 +0.3%
Aviva 146 321.4p £470.71 473.5p £681.31 £210.60 +44.7%
Barclays  210 245.2p £546.56 252.9p £521.09 -£25.47 -4.7%
Cash         £54.33    
Total     £5,073.66   £7,683.62 £2,609.96 51.4%

* I’ve included our two tranches of Rio Tinto separately for now, but I’ll combine them in future updates.

First up, a 51.4% rise since our first purchase in May 2012 is really not bad. But I am disappointed as we were up around 67% before the Blinkx (LSE: BLNX) shock sent its shares crashing and took our gain to only 191% — prior to that we’d been up a storming 380% on it!

The scare there hasn’t been fully shaken out yet, so I’ll be keeping my eye open for future developments — but as far as the company is concerned, it looks like business as usual.

Weakness at BAE

BAE SystemsFull-year results from BAE Systems (LSE: BA) (NASDAQOTH: BAESY.US) on 20 February after weaker US defence spending led to profits coming in below expectations. After an £887m impairment charge from US businesses, the aerospace and defence engineer recorded a pre-tax profit of only £422m — we saw £1.2bn a year previously.

We did get a hint in advance after Rolls-Royce Holdings saw its results similarly lowered for the same reason, but it was still a bit of a disappointment.

But even with a flat year forecast for 2014, BAE shares are still on a forward P/E of only 10 with dividend yields of around 5% expected.

More cash

Talking of dividends, Apple (NASDAQ: AAPL.US) lashed some more cash our way in the form of a quarterly dividend of $3.05 per share. It’s not a huge amount, but dividends so far have added £18.80 to our total from the company, and that takes our return to 3.4% to date compared to a bare 0.3% capital appreciation after costs — and currency movements have gone against us, too.

And Apple isn’t the only company to provide cash, as we’ve also had a final dividend from BP this month of 5.76p per share to give us an extra £6.45. And GlaxoSmithKline went ex-dividend on its final payment of 23p per share for another £7.82.

These might sound like small amounts, but we’ve had a total of £337.44 in dividends so far, accounting for a gain of 6.7% on our initial total investment.

Housing looking good

houseTo finish on an upbeat note, housebuilder Persimmon (LSE: PSN) released results on 25 February, and I liked them! Pre-tax profit rose by 49% to £330m, after full-year revenue picked up 21% to £2.1bn.

Completions were up 16% to 11,528 with an average selling price 4% ahead to £181,861, and that helped boost Persimmon’s return on average capital employed to 17.6% from 12.2% in 2012.

Underlying earnings per share rose by 47% to 83.3p, and going into the new year forward sales are “strongly ahead” at £1.4bn compared to £1bn a year ago.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

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

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