We took further steps to rebuild our depleted portfolios with three notional purchases on Wednesday morning as we continued our search for undervalued shares which should hold up well in volatile stock markets.

Rat catcher -to- linen hire group Rentokil was an easy choice as its shares have already demonstrated their resilience by pushing to new peaks during the recent market downturn.

The main attraction is its £100 million a year net cash flow which has enabled directors to cut debt to a new 15-year low while continuing to make string of bolt-on acquisitions to keep profits pushing ahead Fellow multi-national Reckitt Benckiser is a different case with its shares down by some 10 per cent since the summer although its must-have brands such as Strepsil, Nurofen and Durex offer a high degree of protection against a downturn in global trade.

Again, directors can point to strong cash flow as a result of operating efficiencies and have used the money to finance a major share buy-back programme as well as investing in key brands Drinks group Young & Co is slightly more speculative but has consistently out-performed its rivals in the leisure sector and trading is set to get a boost from the Rugby World Cup with some 25 of its pubs within walking distance of Twickenham.

As usual, we have set a stop-loss target some 10 per cent below the current price.

This can involve some painful decisions and we sold our notional holding in Whitbread under this system last week despite believing in its longer term prospects.

Most of our tips joined in a useful stock market rally last week with three of our four portfolios recording gains of around 1.5 per cent when we carried out our usual mid-week review of progress.

The 2012 portfolio was the one exception with its overall valuation virtually unchanged as a result of a sharp fall in the share price of mental health specialist Cambian on continuing concerns over the impact of higher minimum wages.