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Strategies & Market Trends : Short Selling, Dark Side, Bubble Busting Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: forceOfHabit who wrote (345)	9/7/2006 1:58:19 PM
From: forceOfHabit	Read Replies (1) \| Respond to of 361

surf, Any idea what this language means in their 10K? "The effective tax rate for the year ended December 31, 2005 was 43.3% which is greater than the statutory rates due to permanent differences resulting from non-deductible expenses." CCO's effective tax rate is about 32%. So does that mean LAMR has something like 10% of net income (or about $7mm) of "non-deductible expenses"? Any idea what those could be? Did you happen to catch their last CC? Any comments? I notice they only leave the reply up on their website for less than a week, so I couldn't listen to it. Short interest is already pretty substantial: 6.7mm. The 287.5mm convert (matures 2010) they have outstanding is pretty close to being at-the-money, so its pretty high delta. That could account for (at most) about 5.5mm shares short. Also, do you have any idea what the "mirror" note it holds for its convertible debt is all about? Do you think their bank covenants are vulnerable? For instance, with $2 billion in total debt (after the new issue) and a 6 to 1 ratio, they need EBITDA of about $330 million. With depreciation running around $290 million, it would take quite a drop in operating income to cause them problems. I see what you mean about their EPS being sky-high, but I'm guessing this company trades more on cash flow than EPS. The company basically belongs to, and is run by (president, CEO, COO, COB), the O'Reilly's (who own all the B shares). Even in a downturn, I imagine they can prop up this company pretty effectively, so I'm coming to the conclusion that its a low risk/low reward kind of short. If I were an analyst, I'd probably rate it a hold. Any thoughts welcome. foh