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Dolan Media (DM) update

|Includes:Dolan Co (The) (DOLNQ)

Upon further inspection, the DM story is even more compelling than my original writeup.  If you look at cash flow in 2010, the company should generate (as per their guidance) $94m in ebitda (cash flow) less 9m in interest expense and taxes or 83m in free cash flow.  per shr thats $2.76!  so the stock is trading at 3.6x fcf

now they will likely do more acquisitions with the free cash flow but they have history of doing accretive cash flow deals....3.6x fcf stated another way means your fcf yield or return is 1/(3.6) or 27%.  this means if you trust mgt with your free cash flow then you are making 27% investing in DM at this price.  yes its theoretical unless they pay you the free cash but the point is you believe they can invest the cash better than just paying out dividends and 27% is your return.

get it?   BUY target $20

Disclosure: LONG DM and added yesterday

Stocks: DOLNQ