This post follows on from the last in the series - looking at my current porfolio holdings and trying to get back up-to-date with how they're going and how I feel about their valuations.

Trinity Mirror (TNI)

I came late to the party to Trinity Mirror (LON:TNI) , but it's still up about 40%. Most of my other stocks rising about that level, or a bit more, start to be interrogated along the lines of whether I really want to keep them. Trinity Mirror avoids that fate. Why? Well, it's pretty much the flipside of the argument I posted here when I was distinctly sceptical of Trinity Mirror. There, I argued that situations where debt represents a big part of the capital structure and equity represents only a little are particularly dangerous because the (small) equity portion becomes especially volatile. Small changes in cash flow assumptions make big changes to equity value. It's basically just the story of leverage and aversion to high levels of debt that many investors have, really.

If you turn that around, and keep the assumption that small changes in cash flow assumptions have a big impact on equity value, it's easy to see the positives when market opinion starts rallying. Even slightly more optimistic outlooks boost the share price significantly. It's in that vein that I'm keeping Trinity Mirror, then - even a 40% rise in the value of the equity doesn't change the story much.

Verdict: If my analysis was right, it's still cheap and has a while to go. If it's wrong, it's wrong at both my purchase price and this price, and a wide range of prices either way. Such is leverage!

Communisis (CMS)

Communisis (LON:CMS) are a company I bought in the first place after a bit of deliberation, a bit like Trinity Mirror. Unlike Trinity Mirror, which I bought after it had risen (not a factor in my purchase, I should add), Communisis came along for the ride after they dropped ~40% in a month for no discernible reason. The trading statement they released shortly afterwards was pretty positive, too, so I'm still not sure why that was! They've risen to above the price I originally turned them down at - so it seems logical that if…

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