Here is a quick update on the trades that resulted from the latest monthly screening on the Compound Income Scores Portfolio (CISP) which is based off of the Compound Income Scores. For a reminder this generally tries to pick new holdings from the top Decile & hold positions which at least rank in the top quartile.
First up on the sale candidates was Amino Technologies (AMO) the Software provider to network TV operators, which had reported disappointing half year results as expected earlier in the month. The conundrum with this one is that they say this is due to a major customer order scheduling, but they say they expect to make up the shortfall in the second half. This does however leave them as a hostage to fortune and potentially an accident waiting to happen, so I let it go. The only thing that gave me pause for thought was that the forecasts had jumped after the figures, so maybe an analyst is confident they will bounce back or more likely just following the company line, as ever time will tell, but I'll be watching from the sidelines. The second sale was VP the tool hire & services company which had done well since entering the portfolio at the turn of the year. The score had therefore deteriorated & the shares looked overbought so I didn't argue with it. Those together with the cash that was retained last month & from 3 dividends this month gave room for three new positions, based on their Scores and factoring exposure the portfolio already has in place. Thus to replace VP, Somero (SOM) another cyclical construction related service provider seemed like a natural replacement as it scored better than VP. Next up was a slightly strange one called Chruchill China (CHH) - which is quite similar to Portmeirion (PMP) which the portfolio has traded successfully in the past. In this case it looks as though it is being well managed as it increases the proportion of sales it gets from international catering markets and by increasing value added offerings thereby helping to shrink the contribution from the UK consumer business where conditions remain difficult. Apart from it scoring well i notice that despite the recent upgrades after their trading update, the price has not really responded. So given the numbers I reckon the market might wake up to it and respond positively when they actually deliver their final results at the end of August., assuming of course that the outlook then still remains positive. Finally the last new holding which brings something different to the portfolio was the recently listed legal services group Gateley (GTLY). This one scores well and looks reasonable value having come back from highs recently, despite earnings upgrades and the fact that it is still come the final dividend of 4.8p which is worth about 3% at recent prices.
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