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Strategies & Market Trends : Roger's 1997 Short Picks -- Ignore unavailable to you. Want to Upgrade?

To: Roger A. Babb who wrote (7454)	11/24/1997 8:18:00 PM
From: Ploni	Read Replies (2) \| Respond to of 9285

Someone might want to take a look at Lamar Advertising, LAMR, lamar.com I bought some puts today. This company is one of the largest owners of billboards in the U.S., and has been around since 1902. Their IPO was 4,735,000 shares (8/1/96 @ $16/share, proceeds to selling shareholders), and they have had several offerings since then: 2,200,000 shares (11/22/96 @ 23 3/8, proceeds to company), 957,985 (9/10/97 @ 28 1/8, proceeds to selling shareholder), 1,200,000 shares (11/14/97 @ 30 5/8, proceeds to selling shareholders). I believe 80% of the company is still closely held, 40% by the Lamar family, and 40% by the Reilly family. The company has been on a huge buying spree lately, racking up tons of debt. Last week, an analyst initiated coverage, giving a target of 39, and citing the company's cash flow. biz.yahoo.com When was the last time you heard cash flow cited? Sure, it's nice to have a large, positive number. But don't analysts usually talk about earnings? I calculate the company's price/cash flow is 8.45, which isn't bad, though it's not especially cheap. However, extrapolating from their first 3 quarters of this year, Lamar has a P/E of 172, a Price/book of 13.2, and a Price/sales ratio of 4.67! Oh, yeah, the company's debt to total assets is 90%! S&P recently rated their debt: fool.newsalert.com Also, 10% of their outdoor advertising revenues come from tobacco companies, and new laws may outlaw this type of advertisement. Why is this company trading so high? The average daily volume is 200,000 shares, though only 43,000 traded today. This may not be a safe short, due to the still thin float, which is one reason that I chose the puts. Still, I'd like to hear what others think.