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Beginners’ Portfolio: Price Falls For Barclays PLC And Blinkx Plc

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.

I added Barclays (LSE: BARC) (NYSE: BCS.US) to the Beginners’ Portfolio on 20 February at a price of 254p per share, not long after the bank had posted positive full-year results, and my choice was largely because I thought the forward-looking risk facing the bank was favourable.

barclaysInvestment banking suffering

Nearly three months on we have have our first results, and they’re a little disappointing. For the quarter ended 31 March, adjusted pre-tax profit has dropped by 5% to £1.69bn — after revenue at Barlcays’ investment arm slumped by 28%. We already knew profit this quarter was going to be down on a year ago, but that surprised me a little — especially with Barclays getting back into the controversial area of big bonuses.

In morning trading the share price dipped 10p (4%) to 248p, so we’re still a few pence up — but if we sold today we wouldn’t have covered our costs yet. It’s very early days for us, and I still reckon Barclays is about the the best banking investment there is at the moment.

blinkxVideo news

Video technologist Blinkx (LSE: BLNX) released full-year results this morning, which sent the share price down 5.8p (6.3%) to 86.7p.

That’s despite a revenue climb of 25% to $247m and an adjusted pre-tax profit gain of 30% to $31.9m, with net cash up to $126.9m. The firm has signed up some impressive new clients during the year too, including Toyota, Reebok and Microsoft.

Blinkx is still suffering from the fallout from Ben Edelman’s accusations of dodgy ethics, but Professor Edleman admitted last month that the two investment firms who paid for his work had included a clause by which “If I find nothing, there will be a discount“.

Even after the crash we’re still up 125% on Blinkx, and I won’t be swayed by scare stories from short-sellers.

avivaA good year from Aviva

We’ve seen a 61% price gain from Aviva (LSE: AV) (NYSE: AV.US), to 528p, since adding the insurer to the portfolio just over a year ago — plus an extra 4.5% from dividends. I like Aviva largely because of its healthy and now-sustainable dividends, after the firm was forced into a deep cut back into 2012, and the price appreciation is better than I’d expected by this stage.

For the coming year we’re looking at a forecast dividend yield of 3.2% from shares on a P/E of 11, with 3.6% on a multiple of 10 penciled in for 2015. Even after the past year’s gain, I still think Aviva is good value, and I’m very happy to hold.

A 45% gain

How are we doing overall? Including all costs we’re motoring along with a 45% gain since we made our first investment almost exactly two years ago — I’ll be bringing you a detailed valuation report later this week, so watch this space.

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Alan does not own any shares in Barclays, Blinkx or Aviva.