MENU

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

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.

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.

Finally, if you're looking for investments that should take you all the way to a comfortable retirement, I recommend the Fool's special report detailing five blue-chip shares. They'll be familiar names to many, and they've already provided investors with decades of profits.

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

> 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.