Ted Barac
Hedge fund manager, long-term horizon, deep value

Alaska Communications: High Potential Rewards Justify The Risks

Attractive Characteristics For a Contrarian Investor

At first glance, shares of Alaska Communications Systems (NASDAQ:ALSK) appear very attractive, particularly for a contrarian value investor struggling to find opportunities within a declining universe of value opportunities. The company's current share price is down over 50% from its 52-week high and down over 80% from its 3-year high -- providing an attractive 23% forward free-cash-flow (FCF) yield when using the company's forward guidance.

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Furthermore, with guidance for broadly stable revenues going forward in 2014 (after declines over the past year, relating to their wireless business), the company's growth prospects don't seem commensurate with such a depressed share price.

Upside potential for shareholders from a buyout is also...

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