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Zacks Analyst Interview Highlights: Cox Radio
CHICAGO-(Business Wire)-March 28, 2008 - Zacks.com releases the latest Analyst Interview. Today's interview is with senior analyst Ann Northrop, who discusses Cox Radio (NYSE: CXR).
A synopsis of today's Analyst Interview is presented below. The full article can be read at http://at.zacks.com/?id=2678.
With stock prices so depressed, is it time to tune back in to radio stocks?
I think it's too early. The industry faces more pain this year and possibly next from the slowing economy. I think consumer spending pressures will further depress ad budgets at car dealerships, restaurants and other radio advertisers.
The industry is trading at a 2008 EV/EBITDA multiple of 10x and P/E multiple of 15.5x. These are based on depressed earnings so we look more at free cash flow. On a multiple of free cash flow, the industry looks more attractive at 7.5 times our 2008 estimates and 6.9 times our 2009 estimates.
As a whole, the industry is highly levered at more than 7 times net debt-to-EBITDA. I prefer companies with lower leverage that have room to increase share buybacks and dividends, and have financial flexibility to invest in Internet operations and programming and make acquisitions when the credit markets become more amenable. Cox Radio (NYSE: CXR) is one such example that I think is worth watching.
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