mmg undervalued. opinions please, page-4

one month ago i ventured the view that MMG was "fairly priced" but that the risk remained on the downside.

based on today's close of $1.70 i am prepared to make the call that NOW IS THE TIME TO BUY MMG.

The factors are these:

- annual distribution is currently in the order of 50 cents with no reason to think that this will change near term

- they have approx $400 million cash on the balance sheet, which is itself approx $1.70 per security

- the operating assets are grossly overgeared in the current environment and therefore there is real refi risk.

When the time to refinance comes around, chances are that the $400 million will be 100% applied to debt reduction.

However, if earnings fall off a cliff due to harsh economic times, or debt simply isn't available - MMG can just give shareholders the $400 million back and give the assets to the lending banks.

Therefore, your worst case scenario is a chunky distribution for a while, followed by return of your capital.

Over the weekend i will research exactly what the timing is on the refi - it has slipped my mind.

Viewed differently, this is a high quality Aussie media asset currently trading on an EBITDA multiple of just north of 5.0x. Unthinkable only a few months ago.

This is now very low risk buying due to the cash backing.