In passing given that the All Share and other UK Indices all put in positive performance in May the Simple Monthly timing indicators for all these remain in Hold / Bullish territory. The main broader indices such as the FTSE100, FTSE350 & All Share are 4.7%, 5.7% and 5.8% above their 10 month simple moving averages. While the Mid Cap and Small Cap indices are 11.7% and 7.7% above theirs reflecting continued out performance by Mid Cap names and a more recent return to form by Small Cap.
The Mechanical Compound Income Scores Portfolio has also been updated to reflect month end prices and scores. This shows another month of outperformance for the portfolio which produced a total return of 3.4% which compared to the 2.1% return from the All Share. This will have been aided by the fact that the portfolio is only 10% or so exposed to FTSE stocks and heavily overweight in Mid Cap and AIM names which as a group put in a better performance last month. Please remember this is a Mechanical approach selecting from top scoring stocks in the Compound Income Scores and it will be re-screened on a quarterly basis, so always do your own research before buying any of the stocks that feature in the portfolio or indeed the Scores.
Within the portfolio the star performer last month was Utilitywise (UTW) which ended the month up by 25% with its recovery perhaps aided by the election result and Woodford Asset management increasing their stake. At least as I confessed recently, I did "scalp" 20% for myself in this one too as someone on twitter put it. Otherwise the housing and property related stocks in the portfolio also did well on the back of the Tory election victory which was seen as a positive for the housing market in the UK. Thus Bellway (BWY) and Savills (SVS) were both up 17% or so while Howden Joinery (HWDN) joined the celebration being up by just under 10%. Finally talking of celebrations Finsbury Foods which bakes birthday cakes amongst other things also saw a 10% rise as they announced another acquisition from receivers recently.
On the downside the shocker was of course PLUS500 (PLUS) which was a topic of much discussion this month having ended it down by 50% thanks to something of a rebound towards the end of the month after their AGM update and rebuttal of the bear case on their accounting. Otherwise A.G Barr (BAG), the maker of Irn Bru, was down 2% after a cautious update at their AGM, while trading updates and an AGM statement from Renishaw and Alliance Pharma saw both of them off by around 4%.
Coming up next week will be updates from WH Smiths and Bellway plus results from Photo-Me later in June.
Summary & Conclusion
So another positive month overall for markets and another month of outperformance for the Mechanical Compound Income Scores Portfolio, although it is early days and with such a focussed list of names skewed heavily to Mid and Small Cap no doubt it will have poorer months in the future. However at least the 20 names showed some of the benefits of diversification as despite PLUS500 falling by 50% the rest of the portfolio was able to more than make up for this.
Having said that though I am able to say that it is now Machine 1 Man 1 as my own portfolio put in a better performance this month, but still early days so it will be interesting to see how it pans out over the longer term. Talking of longer term and Man versus Machine I was interested to read that Arnie is going to be back in T5 when a new sequel, or maybe even a prequel with all the time travelling, lands at cinemas in July. So on that note Hasta La Vista readers - I'll be back - next week.