||EPS - Basic
||Market Cap (m)
|post it note: Digital Marketing Group look great value with the current share price not reflecting fundamentals. Might attract takeover interest at these levels and many of the big agencies are looking to expand in the growing digital market place. The stake that swaped hands today looks like that of Ben Langdon who has now left. EBITDA should be around £5 million, with a current market cap of only £16m!|
|glasshalfull: Beat me to it UKI.... whae-hae, another 220k shares issued and yet further dilution.
....and the board have the audacity to question an apparent undervaluation in the share price !
|tom111: Neither is the share price|
|glasshalfull: DIGI is on my watchlist and I await the full year results with interest....possibly released early July?
I've also wondered about the "flat-lining" of the share price.
Couple of thoughts.
They issued a trading update relating to full year results on the 7th April 2009, a week after year end. Fast forward a year and we instead find a RNS issued on 14th April which relates to consolidation/ reorganisation of their businesses. No mention of trading. Nothing sinister I'm sure, but I happen to believe that the market would have appreciated a steer. I certainly would and as time went on without an update - while the share price travelled south. tom111's last post also questions the low price. Could there be hefty exceptional costs relating to the reorganisation?
DIGI are the UK's biggest digital marketing agency with market cap of £22.24m at 30p mid. If we presume that trading is in line then we have 2 x brokers who are forecasting median of £6.79 PTP and 6.18 EPS, therefore PER 4.85. Their median forecasts for 2011 suggest 17% growth in EPS, which leave DIGI on a forward PER of 4.15. Cheap in anyones book.
However, net debt of approx £6m should also be taken into account.
I note the last few posts have indicated the strength in Dirctor Buying.
Cue RNS from last month:-
5 x Directors purchasing 382,450 shares between them (£115k worth).
I agree that this would "normally" propel the share price higher given such confidence by those in the know.
However, the next paragraph in the RNS tells us that the CEO sold 1 million shares....a point I haven't read in any of the posts above. This is the same CEO who in Dec 2009 was awarded 4.8 million shares relating to performance linked options(over 7% of the issued share capital at the time) and duly sold 2.3 million of them.
Anyway, back to the April RNS which indicates that 2 x institutional holders used the 1 million sale to increase their stake. I haven't looked at trades since so unsure if any overhang exists from either of CEO share sales but would suggest that 3.3 million shares may have created some indigestion.
Lastly, the amount of "issue of equity/ options and additional listing" RNS's has caught my eye. 7 x in total since the interims:-
Dec 2009 - 4.8 million shares issued & awared to CEO, per above comment.
Feb 2010 - 788k shares issued to employees - performance linked options.
Feb 2010 - 1.7 million nil cost options to CEO & CFO if 50% share price increase achieved in next 3 years. Given low point in the advertising cycle I don't believe this a difficult target over a 3 year timeline. I'd have thought 100% or greater target eminently achievable.
Feb 2010 - 235k shares issued - exercise of employee share options
Mar 2010 - 768k shares issued - yep....exercise of employee share options
May 2010 - 250...yes, 250 shares issued - exercise of employee share options
May 2010 - 15k shares issued - exercise of employee share options
So, since interims the number of shares in issue has increased by a whopping 10.03% through the issue of shares to satisfy employee performance linked options.The increase in share capital of 6.7 million shares may go some way to explaining the weakness in the share price. Is the company being run exclusively for the employees?
My musings FWIW.
|0scillator: tomm111, Re: #14, here's the reason for the 2.3 million shares sold on 30 Dec:
"Exercise of share options costs Langdon £1m in tax
Digital Marketing Group's chief executive Ben Langdon sold about 2.3 million shares in the company yesterday to raise the £1 million required to settle a tax liability arising on the exercise of performance-linked share options earlier this month. The sale prompted a 6.5% fall in the share price. Langdon now holds almost 3.5 million shares representing 4.8% of the company's capital."|
Digital Mktg share price data is direct from the London Stock Exchange