CCO -- Clear Channel Outdoors

[lincolnc]

Has any one looked at this this?

 

US No.2 outdoor advertiser behind Lamar (LMAR).  Essentially controlled by iHeartMedia (which is a Bain Capital/Thomas Lee LBO).

Shares have slid massively over the course of this year.  Run by an ex Bain guy.

 

Interesting overseas business as well.

 

I've got to believe that cheaper gas mean more driving which means more eyeballs.  Also, if I'm not mistaken, LAMR is now a REIT.  Couldn't they also pursue a similar strategy?

 

Probably the BIGGEST negative is debt load and upcoming maturities.

[rogermunibond]

Biggest issue here is the cross guarantees of IHM debt backed by CCOH (the CCWH Senior Notes).  It's a huge concern if you buy CCO equity.

[lincolnc]

Thanks Roger!

https://www.moodys.com/research/Moodys-downgrades-Clear-Channel-Worldwide-CFR-to-B3-from-B2--PR_340755

 

[morningstar]

CCO doesn't guarantee iHeart's debt, but certainly they are tied at the hip. If the parent defaults on the 1bn or so that it owes CCO, CCO is left with almost no cash flow... I think there will definitely be cheaper entry points in that scenario. Meanwhile if iHeart can survive, its own stock or unsecured bonds offer higher leverage to that upside (multi bagged returns).

 

CCO shareholder litigation against the parent could be an interesting catalyst if it goes off and cuts off CCO as a free liquidity spigot for iHeart.

[Broeb22]

Has anyone looked at CCO recently?

 

It seems like the post-bankruptcy catalyst that will cause float to increase (or the entire company to be sold) is on the way.

 

Cash flow is poor, which makes meaningful deleveraging seem unlikely, but this situation is very messy and I could be missing a substantial source of cash.

 

 

[ugadawg_98]

Billboard company finally separated from formerly bankrupt parent IHRT. Now separate, CCO is trying to deleverage, but common has been crushed by recent equity offering.

 

Anyone looking?

[peterHK]

Just as a cursory glance, they generate no free cash flow. How are they supposed to deleverage if they make no cash after capex and interest payments?

[DooDiligence]

I found this a while back & can't remember who wrote it or where,

 

http://uglymule.com/images/Billboards-01.png

 

http://uglymule.com/images/Billboards-02.png

 

---

 

These new digital formats are dynamic.

 

The following link is not related to what I posted above.

 

https://digiday.com/marketing/dramatically-different-now-year-ago-programmatic-buying-digital-billboards-growing/

[CorpRaider]

Yeah, I've been kicking it around can't get to an "interesting price" above like zero; with so much debt the enterprise value basically hasn't moved even as the stock has been tanking.

[Stuart D]

Yeah, I've been kicking it around can't get to an "interesting price" above like zero; with so much debt the enterprise value basically hasn't moved even as the stock has been tanking.

 

Hahaha - I know ^that feeling.

 

The other outdoor media company related to iheart "Clear Media" has a more compelling valuation. No debt, Market cap $2.2b, Current Assets $1.5b, total liabilities $1b, FCF $100-$200m and a ~4% dividend.

 

Negatives:

- Hong Kong stock exchange - I've seen companies go to zero overnight due to fraud.

- Valuing it on a EV / EBITDA basis makes it look extremely cheap, but P/FCF = 10-20, which is ok but not sensational.

 

Maybe Clear Media needs it's own thread.... when it gets a bit cheaper.

[Jurgis]

And then there's BOMN.  8)