Beginners’ Portfolio: News From Aviva plc, Persimmon plc And GlaxoSmithKline plc

The latest from Aviva plc (LON: AV) and Persimmon plc (LON: PSN), and we check on GlaxoSmithKline plc (LON: GSK)

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

sdf

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.

A few of our Beginners’ Portfolio shares have been in the news recently, but before I tale a look at them here’s a quick valuation update:

Company Shares Buy price Total cost Bid price Proceeds Gain/loss % change
Vodafone 289 168.5p £499.51 188.3p £534.19 £34.68 6.9%
Tesco 159 305.5p £498.23 370.4p £578.94 £80.71 16.2%
GlaxoSmithKline 34 1,440.5p £502.22 1,668p £557.12 £54.90 10.9%
Persimmon 79 617.9p £500.55 1,110p £866.90 £366.35 73.2%
Blinkx 1,319 36.9p £499.68 133.5p £1,750.87 £1,251.19 250.4%
BP 112 434.5p £499.01 451.8p £496.02 -£2.99 -0.6%
Rio Tinto 16 3,048.4p £500.18 2,946p £461.36 -£38.82 -7.8%
BAE Systems 146 332.3p £497.59 440.2p £632.69 £135.10 27.2%
Apple 2 $458.4 £605.98 $487.5 £611.53 £5.55 0.9%
Aviva 146 321.4p £499.71 391.5p £561.59 £63.88 12.8%
Dividends         £265.55 £265.55  
Total     £5,100.66   £7,316.75 £2,216.09 43.4%

With a 43.4% gain since we started, including dividends and all costs, we’re not doing too badly. I had a pleasant surprise checking these figures when I realised I’d forgotten to include the 75p-per-share special dividend paid by Persimmon (LSE: PSN) in June (the ex-dividend date was in April), and that gave us another £59.25 to add to the pot!

Aviva

avivaOur favourite insurer Aviva (LSE: AV) (NYSE: AV.US) released first-half results on 8 August, and we haven’t had a look at them until today. (There’s a beginners’ lesson there — unless there’s anything unexpected on the day, as long-term investors we can take our time getting round to it.)

Things looked pretty good, with chief executive Mark Wilson saying “We have achieved profit after tax of £776 million, in contrast to the £624 million loss last year. Cash flows to the Group have increased by 30% to £573 million“. New business climbed 17% too, and the firm slashed its operating expenses by 9% to £1.5bn, though Mr Wilson was quick to point out that “tackling our legacy issues will take time“. (And that’s another note for beginners — I like it when a CEO is up-front about things like that, in this case right at the start of the report.)

There is clearly still work to be done, but I’m satisfied with the company’s turnaround progress so far and I’m happy to keep taking 4% dividends. I also remain convinced that the sell-off earlier this year was overdone and that Aviva shares are still cheap.

Persimmon

Persimmon also gave us first-half results, on 20 August, and they looked pretty good to me. Legal completions were up 7% to 5,022, revenue was up 12% to £899.9m, and underlying pre-tax profit soared by 40% to £135.3m. Net cash inflow is rising, the firm is investing in new land, and forward sales are up 21%. The government’s Help to Buy scheme is certainly helping Persimmon to sell, and all in all I’d say we’re looking at the pretty-much-inevitable recovery in the business.

As for that special dividend of 75p per share, we weren’t going to get any more until a 95p payment in 2015. But Persimmon has decided to accelerate its “capital return plan” and now intends to pay 10p per share of it in June 2014. There’ll be no complaints from me about that — the real attraction to me is long-term regular dividends, but a shorter-term boost to income is always welcome.

GlaxoSmithKline

GlaxoSmithKlineWhen we added GlaxoSmithKline (LSE: GSK) (NYSE: GSK.US) back in June 2012, one of the big fears for the business was the expiry of patents and the resulting increased competition from generic drugs. But I thought Glaxo was more in tune with the need to expand into newer biotechnology and novel treatments.

News on 13 August gave me some confidence in that feeling, with the drug Tivicay (with the generic name dolutegravir) receiving approval from the US Food and Drug Administration (FDA) for the treatment of HIV-1. Tivicay has been developed by ViiV Healthcare, which is 76% owned by Glaxo after the firm pooled its HIV resources with Pfizer. This is potentially very big news, and I think Glaxo is handling its transition well.

Finally, my idea of the kind of shares that should make up the core of a beginner’s portfolio is the same as my choice for an ISA, or a retirement portfolio — or in fact, any portfolio. I’d start with good strong companies that should stand the test of time and potentially reward you for decades.

Not surprisingly, the Fool’s top analysts think similarly, and they have put together a special report detailing five blue-chip shares that I think would be ideal for anyone at the start of their investing career.

But it will only be available for a limited period, so click here to get your hands on these great ideas that could start you on the road to long-term riches.

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

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.

More on Investing Articles

Businessman hand stacking money coins with virtual percentage icons
Growth Shares

Meet the growth stock that’s beaten the FTSE 100 by 4x over the past year

Jon Smith breaks down how and why a growth stock's easily beating the index average and why this could continue…

Read more »

Environmental technology concept.
Investing Articles

This FTSE 250 investment trust’s yielding close to 13%! But can it last?

Our writer takes a look at a FTSE 250 stock that’s currently yielding nearly 13%. And he considers what this…

Read more »

Close-up as a woman counts out modern British banknotes.
Investing Articles

The Entain share price jumps 14% on an upbeat report – time to consider buying?

The Entain share price is outstripping every stock on the FTSE 100 today following a positive market update. Maybe it's…

Read more »

Businessman using pen drawing line for increasing arrow from 2024 to 2025
Investing Articles

Is this bargain-priced growth stock the best share for me to buy after today’s bullish update?

This former penny stock's had a brilliant run and Harvey Jones has reaped the rewards. But does he still think…

Read more »

Hand of person putting wood cube block with word VALUE on wooden table
Investing Articles

Under £14 now, Persimmon’s share price is trading at less than half its fair value by my reckoning

Persimmon’s share price fell a lot over the past year, but I think a new home-building initiative and improved macroeconomic…

Read more »

Arrow symbol glowing amid black arrow symbols on black background.
Investing Articles

Is this FTSE 100 pharma gem now a brilliant bargain?

This FTSE 100 pharmaceutical giant has been hit by fears of US tariffs and litigation over a key product, but…

Read more »

Warren Buffett at a Berkshire Hathaway AGM
Investing Articles

Is Warren Buffett losing his touch?

Our writer's noticed that Warren Buffett’s investment vehicle has underperformed the S&P 500 during three of the past four years.…

Read more »

Investing Articles

Non-energy minerals are the top performers in 2025. These small-cap FTSE shares are leading the charge

Mark Hartley examines which sectors are doing well in 2025 and the FTSE shares that investors should consider to benefit…

Read more »