You're arbitrarily deciding the valuation is "rich" because the multiple is higher than other cable companies. High multiple does not always equal rich valuation.
I am not arbitrarily defining the value as high. I am saying it is high compared to almost all US/Canadian cable companies.
Have you taken the time to think through the growth drivers and estimate what free cash flow looks like over the next 20 years, and discounted back to the present at a reasonable discount rate? If not, your valuation is arbitrary.
Maybe you've done that and concluded 10x EBITDA is rich (if so, I take back the "arbitrary" comment and we can agree to disagree), but from your comment it sounded like you just thought the valuation was rich because the EBITDA multiple was higher than other cable companies. Ferrari's EBITDA multiple is also a lot higher than other car companies, for obvious reasons. Clearly that's a more extreme difference than in this case, but I think when you compare HSD price and penetration for CABO against other companies it is an extreme difference and it doesn't have the cord cutting risk that other cable companies have and has much lower fiber overlap risk which makes the terminal value significantly higher.
If you think it is undervalued, what is your estimate of CABO's value? And why?
You're getting a 4% unlevered FCF yield at this price. Under very reasonable assumptions of HSD penetration, price increases, and package upgrades, CABO could grow EBITDA 6-7%/year for 20 years. So I think you could see 10-11% compounding for a long time as a stand alone business at this price without the use of leverage. Levering up at low rates to buy back stock you'll do a lot better. And exiting at a premium given opex and revenue synergies for a buyer you'll do even better. I think that's pretty attractive in this environment.