Alaska Communications takes off; SA Pro author sees a value play

SA Pro contributor Alpha Bet argues Alaska's (ALSK +8.5%) big selloff over the last three months, recently exacerbated by disappointment over the telco's Q3 numbers, represents a major buying opportunity.

Alpha Bet points out shares trade near their book value of $1.93, that wireline revenue managed to rise 1.2% Y/Y in Q3 (in spite of the local voice disconnections plaguing U.S. telcos), and that Alaska's purchase of a 33% stake in Alaska Wireless Network gives it access to the state's biggest mobile network. The author does, however, admit Verizon's entry into the Alaskan market poses a risk.

With Alaska expected to produce 2014 free cash flow of $1.18/share and revenue of $292M, the author gives the company a fair value of $2.60/share

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