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, 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.
Has Tesco (LSE: TSCO) (NASDAQOTH: TSCDY.US) finally reached the point where the only way is up? Well, Ive though so several times already and Ive been wrong every time so far. But this time there does seem to have been a shift in sentiment, after new boss Dave Lewis made it clear he will take the necessary difficult decisions, including the closure of 43 unprofitable stores, the introduction of more flexible working arrangements and the cancellation of the final dividend this year.
Since a 52-week low of 155.4p on 9 December, Tesco shares are now back up 44% to 223p. Thats still some way below our portfolio entry price of 305.5p, but with an overall loss of 31% (including all costs) our position is a lot less bad than it has been.
Aviva (LSE: AV) (NYSE: AV.US) has never given me any cause for worry, and its share price has been climbing pretty steadily since I picked it at 321.4p at 515p, wed be sitting on a 67% profit if we sold today, including dividends and after all costs.
But with the acquisition of Friends Life Group on the cards, Aviva is still looking like a great investment to hold. It will be tough on employees, with around 1,500 jobs expected to be lost by the end of 2017, but consolidations in the insurance business were always looking likely.
As it stands Aviva is expected to see 2014 EPS more than double, with dividends back up to an attractive 3.5% yield. Theres an impliedP/E valuation of under 11, which would drop as low as 9.3 based on 2016 forecasts. Well have to see what the new enlarged Aviva is like, but so far Im very happy with this particular choice.
Chips with that
On the growth stock front, I really thought ARM Holdings (LSE: ARM) was looking cheap when the price dipped towards the end of last year, and I was fortuitous with the timing when I dumped Quindell and Blinkx and had virtual money to invest.
Since going for ARM at 913.5p per share in December, the price has put on a spurt to 1,028p by the time of writing. So after all dealing costs, were already up 9%. A forward P/E of 35 based on December 2015 forecasts might seem high to some, but its pretty lean compared to previous valuations of ARM shares. And with no end in sight to the growth in demand for ARMs chip designs, I think I got in at a bargain price.
The Beginners Portfolio might have had a tough 2014, but Im satisfied with its start to 2015 so far.
You can do it
The Beginners’ Portfolio is based on a simple approach to investing — so simple, in fact, that anyone can do it!
To learn more, get yourself a copy of the Motley Fool’s special 7 Simple Steps For Seeking Serious Wealth report, which shows you how investing in shares has wiped the floor with every other form of investment over the past century and more.
It’s completely FREE, so click here for your personal copy and get started today.
Get FREE Issues of The Motley Fool Collective
Get straightforward advice on whats really happening with the stock markets, direct to your inbox. Help yourself with our FREE email newsletter designed to help you protect and grow your portfolio wealth.