Character Group: value trap or compelling bargain?
Decent cash flow, a robust balance sheet, high dividend yield and efficient management of capital give all the appearance of an attractive investment proposition at the current share price. Or has this all the makings of a classic value trap?
The Character Group (AIM:CCT) is a UK based toy designer and distributor with a wide portfolio of third-party brands under license. Ownership The business was founded in 1991 by three executives who remain on the Board of Directors today as Chairman, Joint Managing Director, and Executive Director. Insider ownership has fluctuated in recent years, but senior management own a combined c.22% of shares. Besides this substantial insider ownership, four institutions have notifiable holdings. None of these own more than a 10% stake, making for a diversified shareholder base with no ultimate controlling party. How does it work? Character describes itself…