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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Rawnoc who wrote (35451)	9/25/2009 6:08:07 PM
From: MCsweet	Read Replies (2) \| Respond to of 78748

ROAIK, I had a lengthy reply, but I screwed it up, and I am tired to redo it, so I'll cut it down. I looked up the 2011 notes on Bloomberg and they are rated at CCC- and trading at $0.50 on the dollar with a yield of 59%. That implies non-zero risk of a bankruptcy in the next couple of years. You might feel like you have a better grip on this than the bonds guys, but I don't have that much faith in my analysis abilities. So maybe the upside is 4x, but downside is pretty big if things turn south. Not a no-brainer for me because losing money gets more painful as I age. I might do it as a spec. Thanks, MC

To: Rawnoc who wrote (35451)	9/26/2009 5:07:08 PM
From: Spekulatius	Read Replies (1) \| Respond to of 78748

ROIAK is actually more expensive based in EBITDA/EV than SALM. ROAIK EV/EBITDA value of about 9x is not that great for a shrinking business - it implies a 11x yield pretax on th entire capitalization. Their revenues are down 16% (compared to 12% for SALM). What has helped them were huge cost cuts in overhead. On plus is that the TV One JV may be a hidden asset. I think all Radio plays are basically a dying business and subsequently cigar buts. For the EV/EBITDA ratios of those cigar buts I can buy stocks in some healthy business.