Author Topic: GNCMA - General Communications  (Read 127985 times)

zippy1

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Re: GNCMA - General Communications
« Reply #20 on: November 06, 2013, 02:03:16 PM »
Q3 out.
http://www.cornerofberkshireandfairfax.ca/forum/investment-ideas/gncma-general-communications/10/?action=post;last_msg=139742
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November 6, 2013, Anchorage AK - General Communication, Inc. ("GCI") (GNCMA) today reported its third quarter 2013 results with consolidated revenues of $220 million, an adjusted EBITDA of $79 million, and net income of $9 million or $0.22 per diluted share. These results reflect the consolidation of the Alaska Wireless Network ("AWN") transaction, which was effective July 23, 2013.

For the third quarter of 2013, revenue increased $42 million or 23 percent over the third quarter of 2012 revenue of $178 million. Adjusted EBITDA increased $19 million or 32 percent over the third quarter of 2012 EBITDA of $59 million. Net income increased 141 percent compared to third quarter of 2012 net income of $4 million.


jwfm1985

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Re: GNCMA - General Communications
« Reply #21 on: November 20, 2013, 01:56:38 PM »
Been a slight pullback here - bought some at 9.50. Packer how do you feel about GNCMA at these prices?

tombgrt

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Re: GNCMA - General Communications
« Reply #22 on: November 25, 2013, 09:21:05 AM »
Should have done it earlier but today I sold the rest of my ALSK position in favor of more GNCMA. Bigger, safer, cheaper when accounting for growth, better proven management, building a bigger moat, ...

valueInv

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Re: GNCMA - General Communications
« Reply #23 on: November 29, 2013, 09:25:51 PM »
Both ALSK and GNCMA give different EBITDA estimates.  ALSK @ $120m and GNCMA @ $127m plus $30 m of synergies.  A portion of the AWN is roaming which may be lost if VZ enters the market.  My initial take on AWN was defensive one to prevent VZ from buying ALSK.  However, together they make a nice acquisition target for VZ as VZ doesn't have to build infrastructure and will control 2/3 rds of the market, AT&T will still have 33%.  In addition, this deal will delever ALSK nicely and provide them some powder to expand their broadband service.  If ALSK bonds rally to par I think the stock will do nicely.

Packer

What about anti trust issues?

Packer16

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Re: GNCMA - General Communications
« Reply #24 on: November 30, 2013, 03:51:24 AM »
There may be some but  VZ would be buying infrastructure assets with AWN and would have to let others use it some form similar to the agreement between ALSK and AWN.  There are four competitors in Alaska now (VZ, AT&T, ALSK and GNMCA) and in theory moving the infrastructure assets around does lead to a lessening of the limited competition there is.  It may increase competition because a national player has good scale in ALSK.

Packer

yadayada

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Re: GNCMA - General Communications
« Reply #25 on: December 08, 2013, 12:04:29 PM »
so they are looking at 150 million$ FCF once capital expenditures go down and AWN is added? When will they turn into a FCF machine? And how likely is a buyout within 1-2 years here by one of the big players?

Also you said that a 6x ebitda buyout price is likely? that is almost 1.6 bn$ . Is this company that mispriced? Allthough probably they might get squeezed a bit by Verizon entering? seems like the market is mispricing this one badly.
Still trying to get my head wrapped around this :) .

gary17

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Re: GNCMA - General Communications
« Reply #26 on: December 08, 2013, 12:14:14 PM »
Don't make the and mistake I did, forgetting the debt.

Evj/ebitda is about 5.8 now. Ev is 1.43b and debt is about 1b.

So if we use 7 as the fair ratio would be about

7/5.8*1.43-1=725. Which is a double of current mc.

yadayada

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Re: GNCMA - General Communications
« Reply #27 on: December 08, 2013, 12:27:22 PM »
ok thanks for clearing that up. So basicly there would be two catalysts? This company turning into cash machine once the LTE mostly (?) networks are rolled out and cap exp go down significantly, or being bought out by verizon or AT&T?

gary17

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Re: GNCMA - General Communications
« Reply #28 on: December 08, 2013, 12:45:17 PM »
Yup pretty much.

I'd rather it gets into a great fcf situation personally.
 


racemize

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Re: GNCMA - General Communications
« Reply #29 on: December 08, 2013, 12:52:07 PM »
Don't make the and mistake I did, forgetting the debt.

Evj/ebitda is about 5.8 now. Ev is 1.43b and debt is about 1b.

So if we use 7 as the fair ratio would be about

7/5.8*1.43-1=725. Which is a double of current mc.

Packer had a calculation of adjusted Ev/Ebitda of ~4.5x rather than your 5.8:

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For GNCMA, you have CFO-normalized Cap Ex (15% of revs) of $65m plus 2/3rds of AWN synergies gets you $85m or a FCF multiple of 4.6x.  The normalized EBITDA multiple is 4.6x.  With GNCMA you also get growth of CFO about 27% per year over the past 5 years (or $67m).  To get this growth. GNCMA had to invest $462 m of growth cap-ex (cap-ex - maintenance cap ex) for an incremental RoI of 14.5%.  The key assumption behind both of these derivations is the loss from VZ entering the market will be offset by revenue gains in broadband sales.  Clearly, GNCMA is in a better position to do this.  So given these multiples, ALSK is cheaper but has less growth than GNCMA and at these prices I slightly favor GNCMA.