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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.
LONDON -- It's been a few weeks since our last Beginners' Portfolio update, and I've been chewing over those consumer products companies, like Unilever, again. I'd like one in the portfolio, but I'm put off by their relatively high prices right now.
But as pointed out in the discussion that time, there's no rush. In fact, being hasty can be one of the biggest pitfalls for new investors, and if you don't know what to do, the best thing is often to do nothing. So the next purchase is on the back burner again, and today we'll take a look at what's been happening to the companies we already have...
Persimmon (LSE: PSN.L ) released interim results on Aug. 21, and they really did look good. Revenue for the six months ending June 30 rose by 13% to 806.7 million pounds (from 712.8 million pounds at the same stage last year), and underlying pre-tax profit was boosted by 65% to 98.7 million pounds. (There were a couple of exceptional charges, but they amounted to only 3.8 million pounds.) That led to a 66% boost to underlying earnings per share, to 25.7 pence.
The homebuilder reported legal completions up 6% to 4,712, with selling prices up 7% to 171,206 pounds, which is pretty good at a time when overall house prices are still pretty flat, and both its land bank and its forward sales have been strengthened. And the company confirmed its plan to pay a dividend of 75 pence per share in 2013, which would provide a yield of 9.9% on the current price.
The effect on the share price has been very nice -- it has now reached a 52-week high of 753 pence, which is 20% up on our purchase price.
BP woes continue
BP (LSE: BP.L ) was hit this week by the news that the U.S. government plans to prosecute the oil giant for gross negligence over the Deepwater Horizon disaster, and that was followed by further bad news as Hurricane Isaac dredged up more oil and washed it onto the shores of Alabama and Louisiana, leading to beach closures.
If the charges stick, BP's damages bill could be tripled to $21 billion (13 billion pounds), though BP is reportedly in talks with the U.S. government to seek an alternative settlement.
The news knocked the shares down, and they're currently trading for 423 pence per share, which is down from the 434 pence they were priced at when they were added to the portfolio.
Over on the Vodafone (LSE: VOD.L ) front, the telecom multinational announced on Monday that it has made moves to expand in the Middle East by signing a partnership agreement with Zain group. The deal will see Vodafone working with Zain to provide telecommunications services in Saudi Arabia, Bahrain, Kuwait, Jordan, and Iraq.
Vodafone shares have dropped a bit over the past month, and at 176 pence today they're only slightly ahead of our 168.5 pence purchase price. But current forecasts for the year ending March 2013 still suggest a dividend of 7.3%, which will do me just fine.
That's about all that's in the news for now, so it's back to scratching my head over the next purchase -- all suggestions are welcome in the comments section below, so please let's hear any ideas you might have.
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