Daniel Kim
Long only, special situations, CFA, mutual fund manager

Lamar Advertising: 30% Upside, Very Limited Downside

Lamar Advertising (NASDAQ:LAMR) is an outdoor advertising company that derives most of its revenue from billboard advertising (roughly 80%). The remainder comes from advertising on transit (buses), bus shelters, and benches among other areas. In its billboard advertising business, roughly 70% of its revenue comes from billboard advertising and 30% comes from poster displays. The company owns the physical structure of the billboards on locations the company either owns or leases.

One nice attribute of the industry is that current law bans the construction of new billboard structures in many areas within the US, which limits new competitors from entering the market. By estimate, roughly 50% of Lamar's billboards are "legal nonconforming", which means they were constructed legally...

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