In the AIM IT Project I wrote up a post on CLP. I have since realised there is a glaring error in my analysis which significantly affects my valuation. Lucky for me the margin of safety was so great that it is still an attractive opportunity and I intend to remain long the stock. While I’ll freely admit I make mistakes from time to time this was a sloppy error and should not have happened, I’m disappointed in myself. It highlights the need for readers to do their own homework and not really on blogger’s analysis.
The error relates to the stake in Mediapolis, for which the company has received two cash offers of €20m. I wrongly attributed this 100% to CLP equity and came up with a valuation of 5.8p per share. This was incredibly sloppy, as the very filing that I had linked to in fact clearly stated that Mediapolis has debts of €13m and that the offer was actually only equivalent to 3p per share of the company once debt was repaid.
Special dividend announcement
There has also been a development however, the company has said it intends to issue a special dividend of 2p per share once the restructuring of Mediapolis debt is complete and it is sold. The shares currently trade at less than 2p.
In light of these events I am revising my target to slightly over 3p, but will be reviewing the news coming out of the company carefully. If that 2p special dividend becomes more reassured and the share price doesn’t respond I’ll be going in heavy on this.
Disclosure: I am long CLP.L