While doing some research for my next article, I stumbled across a great company that isn't publicly traded (not directly). It does have its numbers on file with the SEC though.
Classified Ventures LLV (CV) is owned by A.H. Belo Corp. (NYSE:AHC), Gannett Co. Inc. (NYSE:GCI), Tribune Company (TRBAA), The McClatchy Company (NYSE:MNI) and The Washington Post Company (WPO).
CV owns and operates Cars.com, Apartments.com and HomeGain.com. CV is also affiliated with HomeFinder.com.
Unlike their subsidiary, the newspapers that own the company are publicly traded. Their interest in the earnings of CV is hidden from view by GAAP accounting. In some cases, the market cap of the parent may be less than the fair value of the minority interest.
Classified Ventures LLC:
- Is growing at a double-digit compound rate.
- Currently generates revenue of roughly $400 million.
- Has no debt and a mountain of excess cash.
- Returns about half of its earnings to its owners through dividends.
- Sports a ROE in excess of 50% (without debt!).
- Has an after-tax net margin of 15% to 20%.
Based on the current market value of AWAY, MOVE and the price CoStar paid to acquire LoopNet.com, I believe Classified Ventures has a fair market value in excess of $1 billion.
McClatchy, Tribune and Gannett each own about 25% of CV. The Washington Post company owns about 15%.
That’s a remarkable hidden asset for some of these companies.
2011 SEC filing of CV
Article about CV
Forbes: Tribune’s minority stake in the Food Network, CareerBuilder and CV worth $2.26 billion.