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.
Vodafone (LSE: VOD) (NASDAQ: VOD.US) has been good to the Beginners’ Portfolio, providing us with a share price gain of 36% from our purchase price of 168.5p to today’s 229p — and we’ve had a further 12% in dividends since we started, too.
Those dividends include a 3.53p-per-share interim payment for the six months to 30 September, after Vodafone reported a 3.2% fall in revenue to £22,034m with a 0.5% rise in organic operating profit — but a 2.6% fall in adjusted earnings per share to 7.85p.
The future?
That might sound disappointing, but it was pretty much in line with expectations — there’s a flat year for earnings forecast for 2014 followed by a fall in 2015.
The interim dividend was increased by 8% and the company also announced a planned 11p-per-share for the full year for a similar 8% rise. That assuages fears, at least for now, raised by Vodafone’s current policy of promising nothing more than maintaining dividends year-on-year.
With Vodafone shares on a forward P/E for 2015 of over 19 after falling earnings are forecast, and with the share price undoubtedly boosted by the rumours of an AT&T bid, should we be selling? I’ll be pondering that question soon.
Supermarket update
Meanwhile, Tesco (LSE: TSCO) (NASDAQOTH: TSCDY.US) has completed the sale of the bulk of its holding in the American Fresh & Easy chain to YFE Holdings, thus ending that unsuccessful venture into the USA. Overseas expansion is great when it goes well, as Tesco has shown with a number of Asian ventures — it currently gets around 18% of its turnover from that part of the world. But knowing when to cut and run is a part of it, and I think Tesco is competent at that and I’m happy this saga has come to a close.
But Tesco shares have not been doing well of late, being bounced a bit by Sainsbury‘s recent capture of 16.8% of the UK’s groceries market to climb to its highest share in a decade. The Tesco price is now down 8.2% since its recent high in September, to 347p, and up just 14% since we added them 18 months ago — the FTSE is up 26% since then, though we have had around another 6% in dividends from Tesco.
Pharma as well
We’ve had a couple of bits of news from GlaxoSmithKline (LSE: GSK) this month, with the pharmaceuticals giant having completed the sale of some of its shares in Aspen Pharmacare Holdings, South Africa’s largest drugs firm, for 7,059m rand (approximately £430m). After the sale, Glaxo still holds 12.4% of Aspen.
Glaxo also got some good news concerning its HIV-treatment Tivicay (dolutegravir), with the European Medicines Agency’s Committee for Medicinal Products for Human Use offering a positive opinion on authorization for the drug. It’s a step closer to the market now.
The share price has slipped a bit since the summer, but at 1,651p it’s still up more than 20% over 12 months — but it’s only up 12% since we bought in June 2012.
