Packer16 Posted May 10, 2011 Share Posted May 10, 2011 Since the SURW thread has gone the way of the sunset, and I still think SURW has plenty of upside from here, I will start this new thread. Current metrics look pretty good for a cable overbuilder with an ILEC attached. Even with the recent run-up SURW still trades at only 4.8x EBITDA and has an unlevered FCF yield of 14.4% and levered FCF yield of 24.3%. These metrics are at a significant discount to cable and overbuilder peers but more inline with smaller ILECs. As Harry has stated, management appers to be entrenched. They have started a small dividend but the value is in the overbulider properties. They have little debt and thus could be a leveraged buyout target like RCN. I have seen this story play out twice before (once with NTL and once with RCN). At this point, this still is one my highest upside stocks. Packer Link to comment Share on other sites More sharing options...
Shane Posted May 10, 2011 Share Posted May 10, 2011 Packer - why do you look at EBITDA for SURW instead of FFO or AFFO? Interest expense is likely pretty high for a levered company, wouldn't it make more sense to compare that? I have no experience with high debt companies and am trying to get more insight. Link to comment Share on other sites More sharing options...
Packer16 Posted May 10, 2011 Author Share Posted May 10, 2011 I look at EBITDA - maintenance cap ex which is significantly less than cap-ex as SURW has a large amount of cusotmer install cap-ex. The maintenance cap ex is on the order of $15m so versus an EBITDA of $83m so the multiple goes down a little. I use EBITDA in capital intensive low maintancne cap-ex situations. Another metric similar to FFO is FCF with maintenance cap-ex which is another metric I look at. Packer Link to comment Share on other sites More sharing options...
Guest HarryLong Posted July 11, 2011 Share Posted July 11, 2011 Yep, it was a winner! Link to comment Share on other sites More sharing options...
zippy1 Posted July 11, 2011 Share Posted July 11, 2011 Yep, it was a winner! Indeed, it is a winner, Harry. Really thank you for this idea. Link to comment Share on other sites More sharing options...
zippy1 Posted February 6, 2012 Share Posted February 6, 2012 Harry, Thank you for such a great idea. Consolidated Comms. buying SureWest at 47% premium By Greg Morcroft 2%0%-2%-4%10a11a12p1p2p3pCNSL SURW NEW YORK (MarketWatch) -- Consolidated Communications Holdings Inc. /quotes/zigman/96483/quotes/nls/cnsl CNSL +0.68% said on Monday that it is buying SureWest Communications /quotes/zigman/85911/quotes/nls/surw SURW +3.25% for $23.00 per share, or a total of approximately $340.9 million, excluding debt. The deal values SureWest at a 47% premium. http://www.marketwatch.com/story/consolidated-comms-buying-surewest-at-47-premium-2012-02-06?siteid=yhoof2 Link to comment Share on other sites More sharing options...
Guest HarryLong Posted February 6, 2012 Share Posted February 6, 2012 You're welcome :) Link to comment Share on other sites More sharing options...
17thstcapital Posted February 7, 2012 Share Posted February 7, 2012 Anybody here look at HCOM? I own it but hasn't done anything - looks as if Surewest was taken out a 2x (maybe more) HCOM's current valuation. Link to comment Share on other sites More sharing options...
Packer16 Posted February 18, 2012 Author Share Posted February 18, 2012 HCOM maybe an early-stage SURW but it still has to roll-out its TV offering. Once it is rolled out and CF generating (2 to 3 years) it may be able to be comparable to SURW. The one difference is the access line declines are faster now than when SURW was in a similar situation. However, I think the cheap valuation more than accounts for this uncertainty. Packer Link to comment Share on other sites More sharing options...
Guest HarryLong Posted March 1, 2012 Share Posted March 1, 2012 Doing these videos was fun. Especially the animation: "I ran out of Foster's last night" 0:57 in. http://www.youtube.com/watch?v=Nrfc86uF3mg&feature=related Link to comment Share on other sites More sharing options...
Guest HarryLong Posted March 15, 2012 Share Posted March 15, 2012 Harry, Thank you for such a great idea. Consolidated Comms. buying SureWest at 47% premium By Greg Morcroft 2%0%-2%-4%10a11a12p1p2p3pCNSL SURW NEW YORK (MarketWatch) -- Consolidated Communications Holdings Inc. /quotes/zigman/96483/quotes/nls/cnsl CNSL +0.68% said on Monday that it is buying SureWest Communications /quotes/zigman/85911/quotes/nls/surw SURW +3.25% for $23.00 per share, or a total of approximately $340.9 million, excluding debt. The deal values SureWest at a 47% premium. http://www.marketwatch.com/story/consolidated-comms-buying-surewest-at-47-premium-2012-02-06?siteid=yhoof2 I appreciate the support. If you read the Big Big picture thread, I must not be that bright :) Oh well, what's the old Graham saw?....in the long term, the market is a "weighing" machine. Perhaps the same is true of life. Link to comment Share on other sites More sharing options...
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