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MCG Capital Corporation Message Board

  • DONEDEALER DONEDEALER Jul 31, 2007 7:36 AM Flag

    Worst case $1.30 div. on $9.13 NAV

    Nat asset value is $13.23 including $4.10 ($256 million)value in Cleartel & Broadview. This gives $9.13 NAV and a market premium of about 45%. The $1.76 dividend includes $.46 accrual of dividends from Broadview. Excluding this results in $1.30 dividend or about 10% yield. It results in a 14.2% ROE on the $9.13.

    It appears that the market is assuming this worst case in valuing MCGC. There is also a negative evaluation of management for putting so many eggs in these two baskets.

    The key question is: what is the most probable case. Say we split the difference and assume $1.53 dividend on $11.18 NAV. This results in an 11.3% yield, a 21% premium to NAV and a ROE of 13.7%.

 
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