Beginners’ Portfolio: BP Plc Is Back On Track

We have important news from BP plc (LON: BP), Persimmon plc (LON: PSN) and Blinkx Plc (LON: BLNX)

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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.

BPJust after I was pondering the wisdom of having BP (LSE: BP) (NYSE: BP.US) in the portfolio and decided Royal Dutch Shell might have been a better beginners’ choice, what happens?

BP delivers a cracking set of third-quarter results on 29 October and sees its share price jump 5.6% on the day — what’s more, Shell shares drop 5.2% two days later as its Q3 figures disappoint! To be fair, Shell shares had risen in anticipation before the drop, but what do the results look like?

Great results

BP reported an underlying replacement cost profit for the quarter of $3.7bn, up 37% from the previous quarter’s $2.7bn, with cash flow amounting to $6.3bn. And showing a big sign of confidence, the board lifted BP’s third interim dividend by 5.6% to 9.5 cents per share — the same rise in the full-year dividend would provide us with a very nice yield of 4.7% on today’s 478p share price.

Chief executive Bob Dudley said “In 2011 we set a clear target for operating cash flow in 2014 and we are confident in its delivery“, and told us that he expects “capital spending in 2014 to remain around the level expected for this year, in the range of $24-to-$25 billion“, so the firm’s focus on cash flow and careful capital control looks to be paying off.

Shell, in the meantime, saw adjusted earnings at current cost of supplies slump 32% over the same quarter a year ago, to $4.5bn, citing higher costs and lower volumes in both its upstream and downstream activities. And it had local problems in Nigeria.

So far, then, BP shares are up 39% since I added them at 343.5p in August 2012, and we’ve had some nice dividends as well. Maybe the higher risk, plus a bit of fortuitous timing, is paying off — but enumerating embryonic poultry is something I’ll try to avoid just now.

Housing still going strong

housePersimmon (LSE: PSN) has been another of our successes so far, giving us an 89% rise since July 2012, to 1,167p today. And that’s even after the share price fell 10% in the days leading up to and since the firm’s third-quarter statement.

On 6 November, the FTSE 100 housebuilder told us that the effect of the second phase of the government’s ‘Help to Buy’ scheme has so far been “muted”. Persimmon put it down to the limited number of lenders involved and relatively high interest rates, saying “We anticipate sales supported by these guaranteed mortgages will increase as interest rates begin to reduce with more lenders entering the market over coming weeks and months“.

But other than that, the news was good — 20% more visitors to sites, fully sold up for the current year, and a 41% increase in reservations beyond 2013 to £650m.

The star of the show

blinkxAnd what about Blinkx (LSE: BLNX), the video technologist we added back in July 2012 at a share price of 37p?

On 5 November, Blinkx reported a 36% rise in revenue to $111.6m with pre-tax profit up a whopping 335% to $10.8m. When adjusted for acquisition, exceptional charges and a few other things, that translated to a jump of only 93%, but I’m not complaining. Adjusted diluted earnings per share climbed 50% to 3.26 cents per share.

Chief executive S. Brian Mukherjee told us “Based on positive sector trends within the broader macro economic environment and the unique capabilities of our technology and team, we remain confident in our underlying growth prospects“.

Blinkx is by far our best performer to date — at 200p per share today, we’re up 452%!

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.

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