Ive bought quite heavily in the last two weeks on MCP at an average price of $1.25
$100k position now.
This is only an 'average' company as dictated by its long term ROE (although some distortion on long term ROE because of its old publishing division which has recently been divested).
However the share price reaction to the profit downgrade has been significantly overstated in my opinion.
One needs to look through the cycle on this company.
Retail is doing it tough, and we know from other market commentary that 2nd half FY2013 has deteriorated further, so it no wonder that MCP came out with a profit downgrade.
However when estimating 2014 one needs to incorporate their new acquisition into the figures. Too much extrapolation has been made of the current year forecast (on a diluted EPS because of the recent capital raise) without factoring in the increase next years profit from the acquisition.
Happy with my position.
MCP Price at posting:
$1.28 Sentiment: Buy Disclosure: Held
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