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
5 thoughts on “Clear Leisure revisited (AIM:CLP)”
Hi, Could you look at Emblaze or BLZ.L that traded in London.
Price is around 50% of cash rich NAV with hidden asset like small start up comany, gigantic accoumulated looses and possible patent win against Apple..
Sure, will add it to my list to research. Always happy for suggestions of possible undervalued companies 🙂
Hi Investing Sidekick,
Thanks for your posts on AIM ITs and CLP in particular. I had initially bought into what I thought was an attractive asymmetric bet with the downside sufficiently protected.
After announcement of the 2p cash return proposal, I did wonder why there was such a muted response from the market. Having taken a further look, I have changed my mind and believe that CLP is currently fairly priced.
Please have a look at my summary:
I would appreciate any comments. Thanks!
Nice article, I kind of agree that it is a bit speculative at this point, my original reason for investing was based on a flawed valuation and the only reason I’m still invested is the 2p dividend and some potential upside from the Mediapolis deal.
At the moment I think its likely the sale will be made and the 2p dividend paid so then I’m left with essentially a free share, but will admit its a bit speculative as I don’t really like the company if the Mediapolis deal falls through.
Yes, I note the self-flagellation in this post(re:flawed valuation). 😉
From all the signals CLP has been giving, I have to agree with you – Mediapolis seems to be “in the bag”. My worry is there being some other angle that may have been left out, inadvertently or otherwise.
I have been chasing up access to the submitted restructuring proposal. Unfortunately it has been over a week now. At this rate, the court decision may come out before I get my hands on it.