Colt - 2005 New Year, New Highs.............

Tone - thanks for your comments : do you really believe that from a charting point of view that we will see 35p again? Surely we would need to see something catestrophic for that to happen?

CTM has definately been an "out-of-favour" stock these last 18 months (if not longer).

As I see it : CTM has a MktCap of c850m. Net Debt of 750m.

Their physical fibre infrastructure - despite its Asset Register Value probably has a worth of £2bn if you simply cost in the price of digging the trenches and laying the cable (and its still probably only being used at around 33% of its capacity - I understand that rather than laying single cables, CTM initially laid double cables and more recently 4 strands). What the cost would be of initialising and firing up the bare infrastructure and being able to control and manage it I have no idea but I am sure that too would come in at close to £1bn.

As a service provider they are surely top of the range - that's not my opinion : that's the industries' opinion and as we have seen they are accumulating a raft of top notch clients.

Servicing their debt is not an issue for CTM. I know that the question has been raised on this board over recent months as to whether they would be able to service their debt : but I think the consensus was that it was not going to be a problem. Surely management do not foresee that it would be a problem otherwise why would not have paid off their debt early. Lets weigh off the question of their debt against their income stream for the sake of simplicity.

In simple back of a fag-packet calculation you therefore have a company with an infrastrucre value of £3bn against a market worth of 1.6bn (adding their debt to their MktCap). The SP would have to treble to provide a market worth equal to the true asset value of the company.

In this age of consolidation and M&A activity I cannot believe that we will see trading back down at the 35p level (and please God, don't let this be the kiss of death), without some true catastrophy.

The moment market sentiment swings - and like the straw that breaks the camels back - it will be only 1 piece of news which will make someone prominent to sit up and say "hey, how have we missed this one ... CTM is the next best thing" and the world and its wife will want to get on board.

There's the historical arguments that compared to 2 years back with an SP around £1 mark : with the company in a massively better position than it was then which also suggest that the SP should be much higher.

That to me is the logic of it - logic never seems to happen : otherwise making money on stocks would be easy and catastrophes happen.

My view is this stock is massively undervalued and any potential downside is nothing compared to the upside which must surely happen.