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The Beginners’ Portfolio is a virtual portfolio, run as if based on real money with all costs, spreads and dividends accounted for. Transactions made for the portfolio are for educational purposes only and do not constitute advice to buy or sell.
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lthough the Beginners’ Portfolio is based on a long-term strategy, it’s important to keep an eye on short-term happenings. That includes looking back on the recent past and thinking about the near future, and trying to be as honest about our winners as our losers. I’ll take a look at three shares that have performed badly over the past year in a later update, but today I’m going to indulge myself with a look at three recent winners:
If you’re after that elusive stock that always goes up, Apple (NASDAQ: AAPL.US) must be about the closest there is today. Even though the share price has soared by more then 20,000% since 1980, it still managed a 41% rise in the past 12 months — and the portfolio is up 87% since purchase.
As well as Apple’s ability to just get things right, a big attraction is its huge cash pile — and even though the company has finally started paying dividends, at a share price of $127 we’re still looking at a trailing P/E of only 16.
In the next 12 months attention will be focused on the second generation of the Apple Watch, and despite much criticism of its limited abilities, the first generation has already sold millions. Will Apple pull ahead in the “wearables” market? I wouldn’t bet against it.
Buying Barclays (LSE: BARC)(NYSE: BCS.US) was always a risk with the timing. Although I was convinced it was undervalued with a long-term view, we still had investigations into misbehaviour going on and hefty fines coming. And sure enough, since I plumped for Barclays in February 2014 we’ve only gained 4% (accounting for all costs) as the price fell further after my buy date.
But in the decades I’ve been investing in shares I’ve never been any good at timing the market, and I’m not going to change that now.
Over the past 12 months Barclays shares have actually gained 17% to today’s 275p, and are still on a forecast P/E for 2016 of under 10 with predicted dividend yields heading for 4%. I didn’t pick the bottom, but I’m happy it was a good long-term buy.
When I added Persimmon (LSE: PSN) to the portfolio back in July 2012, I was firmly convinced that housebuilders were crazily undervalued — but I confess I wasn’t expecting to see the share price triple in less than three years. Even over the past 12 months there’s been a 68% gain, to 2,003p, so is there any value left now?
I think there is. The earnings-per-share growth of the past few years is set to slow, but we’re still seeing 18% and 14% forecast for this year and next, and that drops the P/E to 12 by December 2016. That’s lower than the FTSE 100 average, but on top of that we have dividend yields in excess of 5% predicted.
Although Persimmon is not the screaming bargain it was after the price has soared, it still looks very good value today.