Analyst coins it in with Avarae

There have been modest price improvements across the board in the last few weeks, despite an uncertain market background in recent days. The Portfolio's performance since the lows seen in March have also been steady and consistent, broadly in line with the market, and with limited volatility. So far so good.

The Portfolio is now 36% up since inception (up 28.1% last time), an eight percentage point gain. The market, as measured by the FTSE 100 (UKX) index, is now down by 4.6% (versus around 8.9% down last time round), a four percentage point improvement.

On a total return basis - in my view this is still the best comparison with the Portfolio's performance - the market is up by 29.6% since inception, versus a gain of 21.7% as of last month. This is a further solid improvement and leaves the performance of this index within striking distance of the gain in the Portfolio. There is no room for complacency.

There has been a dividend payment from NCC Group (NCC) since the last review. This has been added to the Portfolio's cash balance. Cash represents around 17% of the Portfolio's total value at the present time.

As we foreshadowed last time round, Avarae's (AVR) results confirmed a solid improvement in NAV to around 12.2p a share and the company is cautiously optimistic about the current year. The valuation of the company's portfolio showed a small uplift and it is clear to any student of the coin market in recent years that the valuers have taken an extremely conservative stance.

This is no bad thing, since it underpins the likelihood of significant profits being made on book cost when the coins in the portfolio eventually come to be sold.

My own observation of recent auction trends, together with reports from industry publications, bear out the company's contention that the rarest coins are still very well bid indeed: only the lower end of the market is seeing prices soften.

An accounting and company law technicality in the Isle of Man has delayed the completion of the buyback of the shares previously held by Kaupthing Singer & Friedlander. This should now be completed immediately following the company's AGM. There are no effective implications for shareholders in this administrative detail as watertight contractual arrangements are in place.

London & Stamford Property (LSP) has made an interesting departure from its recent focus on industrial and office properties. It has bought a block of apartments in the development recently completed at Highbury, Arsenal FC's former ground. It has paid £41.4 million and has already appointed letting agents to find tenants for the properties. Although financed in the first instance from the group's cash resources, debt is likely to be built into the financing of the purchase in due course.

Recent reports suggest that rental yields in mid single figure percentages are available in the London area on residential property. However, it is a fair bet that L&S has been able to buy the properties in question at an advantageous price and therefore that it could earn a somewhat higher return than this, which would be enhanced by any gearing introduced into the equation. I am hoping to find out a little more detail in due course.

Tristel is expected to announce results in the next week or so, and the recent trading update which accompanied the announcement of a licensing deal for the company's products in the USA suggested that profit figures for the year to June would be broadly in line with market expectations. Tristel (TSTL) has strengthened considerably in recent months, but the Portfolio remains out of pocket.

Overall, the current condition of the market appears to suggest that a long awaited correction might be about to begin, although I am starting to have my doubts about whether it will be either sizeable or long-lasting.

Nonetheless I do not think that this is the right time to be using the Portfolio's cash to add another stock to the Portfolio. I do have a couple of potential candidates in mind - one being Spice (SPI), which the Portfolio has held before. The other is Northbridge Industrial Services (NBI), an industrial equipment sales and rental business that is building up quite a solid track record and which has a very modest valuation indeed.

However, for the moment, I am letting the market take its course and see how matters stand when we next review the Portfolio in a few weeks time.