I wrote about Mondi (MNDI), the global packaging group back in April 2014 here and here, which looked cheap at the time and has done well for me since then. More recently, in July this year, the Compound Income Scores (CIS) portfolio had picked up a holding in another smaller packaging company called Powerflute Oyj (POWR) at 70p thanks to its high score in the Compound Income Scores & the fact that it looked cheap in comparison to its bigger rivals like Mondi. This stock was in the news yesterday as the founding Chairman Mr Smurfit, who has a long history in the packaging industry, has decided to sell out his large holding and thereby facilitate a takeover bid for the whole company at the 90p level. Now while this still seems to be a bit cheap and not that great a premium to the recent price, it probably reflects Mr. Smurfits desire to sell his large stake and get the deal done. Thus being recommended and with over 50% of the shares either bought or where they have received irrevocable undertakings to accept it looks like a done deal.

This is the first holding in the CIS Portfolio to attract a bid, so what lessons can we learn from it? Well as ever value investing can be rewarding if you are prepared to look in out of the way places or  be a bit contrarian. Now the Compound Income Scores are not necessarily contrarian as they do include estimate revisions, but they do otherwise tend to highlight stocks which offer good value, quality, financial security and which offer growing dividends. They also highlight stocks, like Powerflute, which may not be that palatable at first glance. At least in this case they prompted me to take a closer look and benefit from the recent move in this one.

More broadly given this looks like a done deal as Mr. Smurfit seems keen to exit this does give me pause for thought, given his experience of this cyclical industry. I also note that quite a few VC led IPO's (new issues) are opportunistically coming back out of the wood work again now which suggests to me that the market is getting quite fully valued and may be getting a bit toppy. Added to that are the concerns about the US Fed raising rates again, perhaps this month, or more likely by the end of the year at a time when US economic data has been a bit mixed. I continue to watch the US unemployment data closely to see if it breaks upwards through its moving average, but so far it has remained below, as this has in the past been a good lead indicator of a forthcoming recession. Thus I am also getting a bit more wary of more cyclical stocks and in light of that I reduced my Mondi holding recently when it was over 1600p.

As for the Powerflute holding in the CIS Portfolio, this will be reviewed at the next monthly re-screening at the end of this month and as it looks like a done deal I'll probably use it as a chance to lock in a decent 25% profit and move onto the next opportunity. So if you would be interested in finding out what that turns out to be or in getting access to the Scores yourself then you can read more about them and how to subscribe to the Scores here and the CIS Portfolio here.

....round up as there are lots of results and updates out today, but I'll cover briefly those that I have mentioned in the past or those that currently score well on the Compound Income Scores as they may be worthy of further research. So in no particular order we have had:

• Mondi (MNDI) the large (£7bn), well managed, global packaging group announced a positive looking IMS at the 9 month stage. The shares look fairish value on around 14x with a near 3% yield but do have a Compound Income Score (CIS) of 95. It is as I say a well managed group and continues to trade well at the moment, although it is worth remembering that it is cyclical and would be vulnerable in an economic downturn.
  
• Norcros (NXR) which I wrote up recently had an in line H1 trading update with some organic growth and benefits as expected from their recent Croydex acquisition. Post a reverse consolidation the shares are now 210p or so which equates to 21p when I originally wrote them up. Thus they are still quite lowly rated on around 10x with a 3% or so yield while they have a CIS of 63. They refer to mixed markets with benefits from strong housebuilding but weaker consumer demand, but otherwise it seem steady as she goes.
  
• Victrex (VCT) the world leader in high performance polymer solutions which it supplies to industrial, electronic and medical markets announced an in line full year pre close update. This is just as well as it is relatively highly rated on around 19x this years expected earnings but does offer a decent growing yield of nearly 3%. Growth in the business this year has been constrained by weaker demand in the oil & gas and medical areas but they seem to have been able to offset this. It is a good quality business which is also well managed, but therefore does not tend to come cheap although like Mondi it can be vulnerable in an economic downturn, It currently has a CIS of 92.
  
• Empiric Student Property (ESP) as its name suggests this is a property company which specialises in student property and it has been pretty active in acquiring and building out a portfolio since it listed last year. As a result they are raising more money from an on going placing programme. They also confirmed a quarterly dividend of 1.5p and their plans for a 6p full year dividend in the year to next July which at the current 108p level would give a yield of 5.5% or maybe a bit less as some of it will be paid as property income dividends which attract a 20% tax charge unless held in an ISA or SIPP. This seems like an attractive niche in the property market and this one has certainly been active in building up a portfolio to deliver the income which is the main attraction and they expect to increase this in line with RPI after next July.
  

That's it for today as I'm trying to get a more in depth look at another stock done, hopefully might have that ready for you tomorrow or over the weekend.