XLMedia: This Undervalued Affiliate Marketer Is A Good Bet

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About: XLMedia PLC (XLMDF)
by: Real Vision
Summary

Affiliate marketer XLMedia has recently struggled with several issues, including sports betting regulation.

As a result, it is trading at just three times EBITDA, with Cobia Capital’s Jeff Meyers saying it’s “probably the cheapest stock you’re going to see in a long time.”.

He likes buying XLM.LN at current levels, and believes the stock could trade as high as 120 pence over the next 12 months.

Making his debut on Real Vision’s Trade Ideas, Cobia Capital’s Jeff Meyers brought an undervalued affiliate marketer to the table.

XLMedia (XLM.LN)(OTC:XLMDF) is an affiliate marketer which started in the online gambling universe, acquiring customers for companies like Unibet and Betfair.

Meyers said the company has had “a tough time” over the past couple of years, dealing with changing regulations in the sector. Additionally, it has pulled back the media side of its business as it was not very profitable.

As a result, XLMedia is trading at just three times EBITDA. “If you bought the whole company with that valuation, you get paid back in three years,” Meyers said.

The Trade

Meyers sees upside in the company as its publishing arm continues to grow. He also believes XLMedia as it diversifies into different areas such as consumer finance, and into different regions, including Latin America and the US.

He likes buying XLMedia at current levels, and sees it reaching 120 pence over the next year.

“Basically, enterprise value to EBITDA is trading at three times now, probably six times is reasonable,” he added.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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