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Alaska Communications Systems Group Inc. Message Board

  • fishingfishedfish fishingfishedfish Aug 2, 2013 10:02 AM Flag

    Homework for buyers above 3.50...

    I have been a large holder, cost averaged in at $1.80. This morning I sold out completely. I still believe this is a good company doing a great service for rural Alaskans. However With a $600m EV and expectations to do $105-110m in EBITDA/20-25m in FCF this year and declining going forward given the economics of AWN to ALSK - which I suggest anyone buying above $3.50 look at closely - it is no longer a bargain.

    I would in fact argue there has not really been a turnaround, only a mispricing when shares went below $2.00. ALSK has been benefiting from more roaming revs from Verizon as this quarter shows - 80% of the revenue growth and all of the increased profitability came because of roaming. In fact closing the AWN transaction means that they are giving up the majority of the great economics from these roaming revenues.

    The cash on cash return of $25m (this year) on a $150m market cap is no huge value given the risks as GNCMA now controls the economics of the wireless assets. When the market cap was $70m, the cash on cash returns were a bargain. No more. Be careful at these levels and understand what you are buying, that is all I am saying. Good luck to you all

    Sentiment: Hold

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