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Polo Resources (AIM:POL) – a bargain waiting to be snapped up?
Posted 26/08/11
The sale of Caledon Resources will bring in 112p per share to Polo who has a 27% interest in Caledon; Polo has already proposed to pay its shareholders a 2p per share special dividend.
Polo’s 27% interest in Caledon represents 3.93 per share of Polo’s net asset value. In addition to this there is approximately 1.00p/share of cash. Liberum Capital currently estimates that the fully diluted NAV for Polo is 6.57p/share to which the shares currently trade at a 24% discount (5p which does indeed look too wide).
Following the Caledon distribution Polo will have free cash amounting to 4.94p/share which is broadly in line with the current share price. As the shares move ex-div on the 2p per share special dividend, the market cap would be covered 1.25x by the remaining cash and value of listed shares.
We acknowledge that listed shares in small cap resource stocks are somewhat precarious in the current environment, however, Polo also has unlisted investments, which account for approximately 0.84p/share.
Worth considering.
Note the crazy categorisation in Financial Services!
This entry was posted 8 months, 4 weeks ago.
