Beginners Portfolio: Barclays PLC Coming Good

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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.

It’s time for a portfolio valuation update, and we’ve actually been slipping back a bit over the past few months. Here’s what things look like right now:

Company Shares Buy Cost Bid Value Change %
Tesco 159 305.5p £498.23 295.0p £459.05 -£39.18 -7.9%
Glaxo 34 1,440.5p £502.22 1,611.5p £537.91 £35.69 +7.1%
Persimmon 79 617.9p £500.55 1,348.0p £1,054.92 £554.37 +110.8%
Blinkx 1,319 36.9p £499.68 66.5p £867.14 £367.46 +73.5%
BP 112 434.5p £499.01 500.0p £550.00 £50.99 +10.2%
Rio Tinto 31 3,132.9p £996.05 3,241.0p £997.41 -£1.34 -0.1%
BAE 146 332.3p £497.59 404.2p £580.13 £82.54 +16.6%
Apple 2 $458.40 £605.98 $587.00 £677.17 £71.19 +11.7%
Aviva 146 321.4p £470.71 520.0p £749.20 £278.49 +59.2%
Barclays 210 254.2p £546.56 261.0p £538.10 -£8.46 -1.5%
Cash         £92.41    
Initial total     £5,073.66        
Current total         £7,100.74 £2,027.08 40.0%

We’ve had a final dividend from BAE Systems (LSE: BA) since our last update, of 12.1p per share, so that’s added an extra £17.67 to our pot. Dividends now make up £375.51 of our total gain to date of £2,027.08, and that’s a decent amount — in fact, dividends alone have given us a 7.4% return, which is easily enough to beat cash in the bank even without any share price appreciation.

We’re on a healthy total gain on BAE, despite some wobbling in the sector, so I’m happy with the purchase.

Growth share collapse

blinkxThe biggest disappointment is continuing fall in the Blinkx (LSE: BLNX) share price, which has been going on since a much-criticised negative report on the company. But the recent results reported a 30% rise in pre-tax profits. After the crash, the shares are on a forward P/E of 14.5 based on 2015 forecasts, and that’s almost bang on the FTSE’s average — and it drops to just 11 on predictions for 2016.

That’s for a growth share with a PEG of 0.8 for 2015, dropping to 0.3 for 2016! But growth investors can be a fickle bunch, and I expect a lot of the “get rich quick” crowd have leapt off the bandwagon. I expect to still be holding in 2016, and I expect the share price to have recovered a good way by then.

PersimmonBuilders on top

After the Blinkx fall, our biggest winner so far is Persimmon (LSE: PSN), which has rewarded us with a share price gain of 110.8% with an extra 11.8% in dividend cash — and we’re due another 70p per share on 4 July.

When I added Persimmon to the portfolio in July 2012, the whole housebuilding sector looked stupidly cheap to me, and so it has turned out with impressive growth across the sector. I reckon there’s plenty more to come, albeit at a slowing pace, in the coming years.

Breaking even on banking

That brings me to our most recent addition, Barclays (LSE: BARC) (NYSE: BCS.US). In mid-price terms, the shares have risen from 254p to 262p, which is a gain of 3.1%. But accounting for the buy/sell spread and dealing costs, if we sold now we’d realise a loss of £8.46 or 1.5%.

We’re very close to break-even, but it does illustrate how the costs of trading can eat into your profits. We’d need to see the mid-price of Barclays reach about 265.2p to cover our costs. That’s a rise of 4.4% before we get into profit, and here we’re talking of a share with a very narrow spread — for smaller cap shares with a wider spread, you’d need a much bigger gain to break even.

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Alan does not own any shares mentioned in this article. The Motley Fool owns shares in Tesco and Apple, and has recommended shares in GlaxoSmithKline.