In brief we have had a couple of AGM updates from stocks that feature in the Mechanical Compound Income Portfolio. See the Portfolio tab and scroll about half way down for more details of this if you are not familiar with it.
The first statement was from Alliance Pharma (APH) who reported some reasonable revenue growth overall and from a recently acquired product, which is something they tend to do on a regular basis. The also flag that they have financing available to look at more of these.
The shares have had a reasonable run after trading sideways for years and perhaps, if they can get the earnings moving ahead, then maybe they could sustain a breakout. This might allow a move up to say 50p which would leave it on a more full looking rating of 14 to 15x. However as you can see from the chart below they are looking over bought in the short term with some negative divergence on the RSI suggesting a loss of momentum in the short term. So personally I'm wouldn't be chasing this one up here, but it might be worth revisiting on a pull back below 40p to fill a gap on the chart which I guess could be facilitated by them going ex the final dividend next month.
Meanwhile the other topical stock PLUS500 (PLUS), that features in the same portfolio, has also had an AGM statement out this morning. As I'm sure there will be lots of commentary on this one I'll not cover the detail. However I note that they are talking about Q2 revenues being down and being hit by $4m in the last two weeks due to the regulatory issues. They also flag marketing costs being "appreciably" higher and a "conservative" estimate of £2m of extra costs for the remediation work. I also note that they now say that this is likely to take "approximately" a month rather than the days or a week or two that some had hoped. So all in all I would expect to see some downgrades coming through on the back of this.
They have also partially backed down on a controversial salary increase for directors saying that if it is approved none of them will take the raise until this situation is resolved. They also refuted a number of the allegations surrounding their accounting.
Thus a fairly full response from the company to clarify the situation which may help to reassure and further the recovery in the share price that was seen yesterday. I guess time will tell how serious this set back turns out to be and it may prove to have been a great buying opportunity. However, personally I am not prepared to buy into this one but I will see how it looks when I come to do the quarterly review for the Mechanical Compound Income Portfolio at the end of June.