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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.
Its been an eventful month for the Beginners Portfolio after I turfed out two growth shares gone bad, Quindell (LSE: QPP) and Blinkx (LSE: BLNX), and welcomed ARM Holdings (LSE: ARM) (NASDAQ: ARMH.US) as a replacement.
Heres how our valuation is looking, with prices taken on 16 December:
| Initial investment | 5,073.66 |
|---|
| Company | Shares | Buy | Cost | Bid | Value | Change | % |
|---|---|---|---|---|---|---|---|
| Tesco | 159 | 305.5p | 498.23 | 164.5p | 251.56 | -246.68 | -49.5% |
| Glaxo | 34 | 1,440.5p | 502.22 | 1,327p | 441.18 | -61.04 | -12.2% |
| Persimmon | 49 | 617.9p | 352.21 | 1,498p | 724.02 | 398.81 | +122% |
| BP | 112 | 434.5p | 499.01 | 371.0p | 405.52 | -493.49 | -18.7% |
| Rio Tinto | 31 | 3,132.9p | 996.05 | 2,667p | 816.77 | -179.28 | -18.0% |
| BAE | 146 | 332.3p | 497.59 | 444.7p | 639.26 | 141.67 | +28.5% |
| Apple | 14 | $65.50 | 605.98 | $108 | 951.73 | 345.75 | +57.1% |
| Aviva | 146 | 321.4p | 470.71 | 462.3p | 664.96 | 194.25 | +41.3% |
| Barclays | 210 | 254.2p | 546.56 | 222.5p | 457.25 | -89.31 | -16.3% |
| ARM | 80 | 913.5p | 744.46 | 917.0p | 723.60 | -20.86 | -2.8% |
| Cash | 22.56 | ||||||
| Current value | 6,098.41 | 1,024.75 | +20.2% |
My ill-judged venture into Quindelllost 165.62 (33%), but I was lucky to get out when I did. Since selling at 139p, Quindell has slumped to 34.5p, briefly hitting a low of 24.1p along the way. Had I held on, Id now be telling you of an 85% loss instead!
Blinkx lost even more, with a 40% drop of 199.72. The price has remained pretty stable since then, but as myoriginal reasons for buying had evaporated Im convinced it was still the right decision to dump.
A new hope
Those two have been replaced by my new growth hope, ARM Holdings, whose shares are actually up more than 400% over the past five years. But the price has been pretty much flat since the start of 2013 and has actually fallen 8% in the past 12 months, while earnings have carried on rising.
Thats helped bring ARMs P/E valuation down to something looking a bit less outrageous from a trailing P/E of over 52 at the end of 2013, forecasts suggest a multiple for 2015 of under 32, which is the lowest its been since 2008.
The story at ARM is pretty much unchanged, as the world is demandingincreasing billions of ARM-designed chips every year.
I remember saying years ago that the world ofmobile computingwas in its infancy, and it still is. Processor chips are becomingincreasinglyubiquitous, and the demand is only going to go one way and I cant see it slowing until almost every daily object we lay our hands oncontains processing power.
Many more years
Earnings growth for ARM is forecast at 14% this year and 22% in 2015. Thats a slower rate than it has been, but I think its still plenty to justify the current P/E and provide room for further growth.
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Alan Oscroft has no position in any shares mentioned. The Motley Fool UK has recommended ARM Holdings and GlaxoSmithKline, and owns shares in Tesco and Apple. We Fools don’t all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.
