GEO Investing

We hope you were able to have a great 4th of July weekend celebration. That is of course, if you live in the U.S. If you’re an international member of ours, we hope you were able to use today’s respite from the market to relax a bit in preparation for the remainder of the week.

Lately, we’ve been spotlighting article contributions by members, as well as pitches by ‘Avoiding the Crowd’ podcast guests. Today, we’re revisiting a pitch on Wideopenwest, Inc. (NYSE:WOW) by Andrew Walker, Portfolio Manager at Rangely Capital. The stock’s price at the time of his April 21, 2021 presentation to us at SNN Network’s virtual Planet Microcap Showcase was about $12.96 (average between day and day low). So we’d like to congratulate him on the performance of WOW since he spoke about it. As of last Friday’s close of $21.66, the stock is up 67%.

WOW provides high speed data, cable television, and digital telephony services to residential and business services customers in the United States.

At the time of the pitch, Andrew contended that:

“WOW is extremely cheap. WOW is a little bit over $1 billion in market cap and approaching three and a half billion dollars in enterprise value. This company did about $440 million EBITDA last year. I think in the next year, we should be looking at about a $500 million EBITDA run rate as they kind of penetrate some of their edge outs and everything. We’ll talk about that later. But the bottom line is WOW trades at about eight times EBITDA.

There are no perfect publicly traded peers for a while. There’s only five publicly traded cable players. There’s WOW. There’s Cable One, Charter, Comcast and Altice. The other four are not cable overbuilders. They’re all pure play cable companies. So there’s no cable overbuilder that’s publicly traded.

However, in the past year, there have been several deals in the cable space. The best deal to compare is Astound, which actually owns RCN, the cable overbuilder I talked about earlier, Astound traded late last year for about 13 times EBITDA. And again, this is the best peer for WOW. They’re not a pure play cable overbuilder, but most of their EBITDA is from an over builder…”

If you missed Andrew’s and other guest pitches in the virtual showcase, or were not yet a member of GeoInvesting, please go here to view them.

We want to stress that the guests of the stock pitch panels are handpicked to try and ensure as much quality as we can.

We’ll be doing it again soon. And you may not have known that you can attend Bobby Kraft’s virtual conferences live. We usually let you know all of the details of the showcases as they become available. We encourage everyone to try and make the next one.


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