Update: National Grid

Last week’s interims from National Grid were undeniably messy, thanks to higher costs caused by storms in America, lower taxes in that country and a failed pipeline project in Britain: on a stated basis pre-tax profits fell by 33pc, even if the decline was just 4pc on an underlying basis.

However, the company is primed to sell its remaining 39pc stake in the UK gas distribution arm Cadent to realise £2bn in cash and is still targeting asset growth of 5pc to 7pc a year. Both factors help to underpin the all-important dividend; the interim payment is being increased by 3.8pc and the 5.5pc prospective yield makes the stock a core income holding.

Questor says: hold

Ticker: NG

Share price at close: 860.9p

Update: Tracsis

A hefty retreat in the share price of Tracsis, the Aim-quoted transport software and data specialist, looks a bit harsh in light of this month’s full-year figures, and investors should keep their nerve, even in the knowledge that it’s the type of stock that could find it harder going in an environment of rising interest rates.

Healthy increases in sales, profits, net cash and the dividend all highlight the firm’s expertise and the strength of its competitive position, which it continues to bolster with bolt-on acquisitions designed to add to the momentum that already exists in the business (a much better and less risky strategy than using so-called “transformative” deals to try to create momentum when there isn’t any).

This means that the only real issue now is the stock’s valuation and this may explain why it was caught up in October’s market melee.

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A market value of £170m means that Tracsis trades at 3.5 times sales, even adjusting for the £22.3m net cash. A share price of 600p puts the stock on 23 times earnings. Both multiples represent a substantial premium to the UK market.

Tracsis can be said to deserve such ratings, given its track record and potential. But as interest rates go up, so do returns on cash and yields on bonds. As a result, investors may become less inclined to pay up for growth stocks, given the greater dangers to capital.

Tracsis will be a good litmus test. If the market’s risk appetite returns, it could rebound quickly. If the jitters prevail the shares may struggle to make much headway in the short term.

The cash pile and strong competitive position suggest the shares are worth holding if you are seeking long-term capital gains, but patience may be needed.

Questor says: hold

Ticker: TRCS

Share price at close: 615p

Russ Mould is investment director at AJ Bell, the stockbroker