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Is this 7% dividend yielder now oversold, or simply a classic value trap?

27/12/2018 · XLMedia PLC (XLM) 

AIM Dividends

Is this 7% dividend yielder now oversold, or simply a classic value trap?
Our Premium Research from April 2017 provided an in-depth look at XLMedia (AIM:XLM), the market-leading performance marketing company. While the business primarily directs paying users to its partners in the gambling industry, it has also been branching out into other (less controversial) sectors such as financial services. Since our initiation note and subsequent update the share price has fallen further, putting the shares on a current dividend yield of 7% and a very modest rating. Could this be an excellent buying opportunity or are there further problems lurking?

- History

XLMedia PLC (LON:XLM) is an AIM listed digital and performance marketing company. The highly cash generative business was founded in 2008 by three Israelis, Assaf Levy, Ory Weihs and Yaron Nahari. The company went on to successfully IPO on the London Stock Exchange in 2014. At the end of IPO year, revenues were $50.7m and have since grown to $138m (FY17). Over that period the business has expanded beyond Europe, growing operations in North America, Oceania and Asia.

During the last 12 months the company has experienced a dramatic decline in its share price. The 52 week high was 218p, a distant climb from the current 75p. In a recent stock screen of the whole LSE, XLM stood out with an historic earnings PEG ratio of 0.7x and an attractive dividend yield. This was a company that required further investigation.

- Management

Experience

The XLM senior management team includes the following experienced individuals:

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