...according to the latest Capita Asset Services Quarterly Dividend monitor in which they are forecasting a modest fall in underlying dividends of 1.3% for 2016 after 6.8% growth in 2015. This is predicted on the back of major dividend cuts and takeovers already announced with the mining and oil sectors also making a major contribution to this, although they note the oil majors have held their dividends for now. If they join in then I suspect the fall at the headline level could be even larger given that RD Shell and BP are the Number 1 and 3 in the list of largest payers.

Other interesting snippets are that the strength of the US$ v £ helped to boost dividends by £2.5bn or nearly 3% as around 40% of dividends in the UK market are declared in US$'s.
While more than 50% of the yield comes from the top 15 companies further illustrating the concentration risk in the UK index, while Mid Caps saw much stronger growth in dividends.

Despite this expected fall they point out that Equities still offer the highest yield of all asset classes, although clearly this may reflect the capital risks and the distorted rates on cash and bonds. There is also a useful table on page 11 breaking the index into cyclical and defensive sectors which might be worth noting going forward if we are going into a more difficult phase in the market. 

 So we have a rally today to end another tricky week on a slightly more positive note, hopefully, if this mornings rally can be maintained, but I'm not sure we are out of the woods just yet, even though FTSE seems to have failed to decisively break its August intra day low for now.

Don't take my word for it though as just when you thought it might be safe to go back in George Soros pops up again, talking his own book on Bloomberg by talking up a hard landing in China and saying it will deepen the rout in stocks. Meanwhile on the technical front, an analyst who I had a lot of time for when I worked in the city, was interviewed here and there is a podcast too, if that is of any interest to you, but in summary  he is saying that he believes the globe is slipping into a collective bear market, and advises taking risk off the table, having warned last year that stocks were peaking and to prepare for a bear market.

This all seems to tie in with the Monthly timing indicators that I follow for the UK market which have been indicating a bearish trend for the main indices like FTSE 100 , FTSE 350 and FTSE All Share since August, although up until now the mid and smaller cap. indices had just managed to cling onto a bullish trends. So with this months likely declines, barring a v shaped recovery next week, it seems likely we'll get a full house of bearish signals on all the indices when they are updated at the end of next week. While I note in the US that smaller indices have already been in a bear trend for a while and the S&P500 had lacked breadth as it had been driven mostly by the top 5 or 6 tech giants such as Apple and Amazon. Any way that's enough bearish market talk for today what have we had on the company front today?

Character Group (CCT) another holding in the CIS Portfolio has released a trading update. Turnover is said to be up by 6% so far this year although this looks about 4% light of current forecasts,  but they do say that they are confident of meeting full year market expectations which are for flat earnings.

They have also announced a number of management changes including the Chairman becoming non executive having been an executive previously. Otherwise the statement sounded fairly confident about the outlook and the prospects for their new products this year. So looks like steady as she goes for now with this one and it will remain in the CIS portfolio as it continues to score well with a CIS of 99 and looks good value on around 10x with a 2.5% yield.

Otherwise another stock Compuacenter (CCC), which has come close to making it into the CIS portfolio has also announced a trading update today. This was for their full year to 31st December 2015 and they said that these are anticipated to be in line with the Board's expectations for 2015, as upgraded at the time of the 2015 Interim Results.
The main features were significant headwinds from the weakness in the € versus the £ and a good recovery in Germany while France remains on a improving track. The UK was also strong and they also generated £44m of cash which took their net funds up to £120m at the year end.

On the outlook they remained bullish on the prospects for Germany and a continued turnaround in France, but they did suggest the UK may be slower. Despite this though they were still confident that the benefit of their portfolio of countries should enable them to show another year of progress in 2016. This seems to be reflected in mid single digit growth forecasts for the current year which leaves it looking fairly valued on around 16 to 15x with a 2.5 to 2.7% yield for the current year and 2016 respectively. It continues to score well with a CIS of 89 but looks like a solid hold here rather than a buy I would say. if it should however continue to drift off then it might be worth another l0ok around say 780p where the highs from last years trading range and a rising 220 day moving average might offer some technical support.

Another busy day  for stocks which feature in the Compound Income Scores portfolio. So in brief firstly EMIS the healthcare software provider produced a trading update which saw turnover held back by timing of contracts within Secondary Care so growth in revenues of 13% look about 3% light of forecasts. But they do say overall trading is in line as they saw further progress in the like-for-like operating margins. It will remain to be seen if the earnings can come in line or if we will see downgrades on the back of this. With a highly rated stock such as this, which has held up well in the recent sell off, it is therefore perhaps unsurprising to see it off by around 12% on the back of this announcement, but it does remain a quality company nevertheless, albeit highly rated to reflect this.

Meanwhile 32Red (TTR) announced a trading update for the full year with record revenues and EBITDA expected to be slightly ahead of expectations. They also said that the new year had started well with revenues for the first nineteen days in January up 27% on the corresponding period in 2015 and up 54% including contribution from Roxy Palace which they acquired last year.  On the back of this the shares spiked over 150p first thing and the holding therefore hit the 10% risk control limit that I set the other day. I have therefore sold half the holding at this mornings price of 152p to rebalance and retained half as I note their brokers apparently put out a note the other day with a target price of 200p. 

As for the proceeds I did discuss the other day topping up some losers, which is not generally a good thing to do and one of those has now slipped into the sell zone as far as the Scores go. So I have resisted the temptation to do that. While I could have done a full re-screen and sold another three stocks as a result, I decided in the end to just add another holding instead as given the current volatility doing lots of trading may prove to be counter productive.

The new holding I decided to add was XL Media (XLM) which I mentioned the other day and which looks good value to me and has a CIS of 88 v 86 for TTR. They have also announced today a final dividend today which means their full year payout, which is based on a 50% payout policy will be 24% ahead of forecasts on Stockopedia. This statement therefore also suggests to me that their eps will also therefore be around 4% ahead of forecasts at just over 10c. So this one has been added to the portfolio at this mornings 63.3p price and therefore effectively keeps exposure related to a similar industry to 32Red but in a stock which looks much better value (94 value score v 14 for 32Red) and comes with a 5%+ yield versus 2% for 32Red. Whether this proves to have been a good idea or reduces the risk and increases the returns remains to be seen!

Talking of returns, I note that after this update that the portfolio seems to be down by around 5.7% since the year end which compares with -9.3% from the FTSE All Share year to date. So at least it seems to be holding up reasonably well in a down market too, although no doubt helped by continued lack of exposure to commodity sectors and the astonishing running streak from 32Red. Obviously if a market bounce back comes about and should be led by the commodity sectors then it would obviously then lag that.

A couple of stocks which are in the Compound Income Scores portfolio reported updates today. Firstly we had a trading update from W.H. Smiths (SMWH) covering the 20 weeks to the 16th January 2016 and the all important Christmas trading period. Once again these pleasantly surprised despite ones natural scepticism about their format. They saw total sales up by 4% and like for likes (LFL's) of +2% over this period with the travel business again leading the way with 12% growth overall and +5% LFL's. The high street business was essentially flat and apparently continued to benefit from what they describe as the "colour therapy phenomenon" (colouring books for adults). As a result of the strong sales performance in High Street over the 5 week Christmas period, they say they now expect profit growth for the year to be slightly ahead of plan.

So it is good that they are at least ahead of plan so no need for downgrades like some other retailers, but whether it is enough to see estimates edge up a few percent remains to be seen. Therefore using current forecast with the shares up 6% to 1685p this morning in a weak market leaves them on a fullish looking 18x with a 2.6% yield which both come off the back of forecast growth of around 10% currently. Meanwhile with this continued growth and some other good operating metrics they continue to score highly on the Compound Income Scores (CIS) with a score of 99 so it seems likely that they will continue to be held in the portfolio.

The other holding that has reported a year end trading, product and technology update is the £150m market cap. fire alarm manufacturer Sprue Aegis (SPRP). These were also suggesting a performance slightly ahead of forecasts with sales at £88.3m some 2.2% ahead of forecasts for example. Otherwise the statement was a bit mixed covering as it did a slow down in France in h2 after a strong boost from regulatory changes in the first half, while the UK saw a good pick up on new product launches into the trade. Meanwhile they highlighted a big negative effect from the strength of £ v € and weakness of the £ v $, although I note the first of these has gone in the opposite direction recently which may help them going forward if that is maintained or extends further. The other negative was that they flagged higher stock levels, as expected, as a precaution when they moved some production facilities to a new site last year. Despite this they did however flag that they expect to still have £22.4m of cash up from £15.9m last year demonstrating their cash generation.

On the outlook they struck a cautious tone and while they said they expect to trade in line with forecasts they see the results being heavily second half weighted, which then leaves them at risk of disappointing if things slip. This seems a risk as they flagged a delay in launching some products this year in the carbon monoxide and hard wired fire alarm sectors but at least they should boost next year now they are launched.
Talking of expectations, forecasts are for earnings to fall from this years expected 21 to 22p to around 17p - probably as the boost from the initial boost from French regulatory changes drops out.

On this basis at this mornings price of 328p (down 3%) they trade on a full looking 19.3x with a decent 3.65% yield on a forecast 12p dividend, +20% from this years expected 10p. However on my preferred EBIT to Enterprise Value metric they trade on a decent 9.4% yield on this metric adjusted for the £0.5m of share based cost that they flagged in the statement. As a result of this, the decent growing yield and quality operating metrics it continues to score well in the CIS coming in with a score of 96 and as such it will likely remain in the portfolio.

Summary & Conclusion
So a couple of reassuring updates form stocks in the portfolio which are therefore holds, but I note that the market is continuing its slide today as the bearish mood of the market from the start of this year continues. Therefore probably no rush to get out there buying unless you have lots of cash to invest as the market seems to be trying to break its lows of last summer. It may however be worth watching out for opportunities thrown up by indiscriminate or forced sellers but always do your own research first to make sure you are comfortable with what the company does and how it makes its money.

I say makes it money as I would not recommend buying blue sky loss makers or those that do not pay a dividend, although I know some do - each to their own I guess. By the same token if you are fully invested or geared even, then definitely worth looking through your holdings and making sure that you are happy to continue holding them for the long term and think about weeding out any flaky or weak holdings and especially zero yielders unless you are really confident about their future prospects being reflected in the share price at some point.

Sorry for the lack of posts in the last few days, but with the markets being so unsettled there seems little point in putting out too much at the moment. Today we have however, had a few updates from stocks that I have written on in the past which may be of interest, so here is a brief review of the key points.

• IG Group (IGG) - Interim results. A stock which had featured in the Compound Income Scores portfolio before being sold at the start of this year. These results seemed a bit lack lustre as despite an 8% rise in revenues they reported profits and earnings down by 2.8% and 2.5% respectively and an unchanged dividend. This however is on the back of them investing in the business for future growth to open new offices around the world and grow the more recently introduced stock broking business. So given that they make good returns on capital, this is what shareholders would want them to do, if they can, so I guess we shouldn't criticise them for that. However I see that forecasts are for a strong growth in earnings this year as they are expected to bounce back by 18% from last years 10% decline. Given that they have seen a fall in earning in H1 that will leave them with a lot to do in H2 to hit those numbers so I guess we could potentially see some downgrades? Having said that though they do suggest that most of the big investment will be done this year as previously guided and they should have done well on the back of the recent market volatility so I guess time will tell. It is a good quality business, but I feel the rating looks full on over 17x this years earnings with a 4% yield which is predicted on forecast dividend growth of 6.4% to 30p which may not come about if the earnings should disappoint again in the second half. I note the Compound Income Score (CIS) has recovered recently to 87 so it still has a lot to recommend it for the longer term.
  
• Fairpoint (FRP) - the £63m market cap debt and legal services group put out an in line trading update which is not therefore that significant. However they did clarify that the amount of their legal business exposed to the potential clampdown on whiplash claims was just 8%. Furthermore they suggested that the legislation, if it is introduced, will not apply retrospectively. So given that the shares had fallen heavily on concerns about this change when it was announced, this may provide the market with some relief. Thus the shares, although they are AIM listed and not the highest quality in the world, I have bought back in recently at lower levels but they may still be worth another a look as they still only trade on around 7x with a 5% yield and have a reasonable (CIS) of 74.
  

So just goes to show, even in what feel like horrible markets there are always opportunities around if you focus on the fundamentals of the Companies and are prepared to dip your toe in despite the gloomy mood.