Busy day & a trade for the CIS Portfolio.

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.