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Clear Channel Outdoor Stock Could Help Your Portfolio Beat Inflation

Matthew Smith profile picture
Matthew Smith


  • Many of Clear Channel's largest expenses are fixed costs which are locked in for years.
  • The company has been upgrading to digital billboard faces which require less labor and can be operated remotely.
  • Management has discussed that they could look at tuck-in or bolt-on acquisitions, which could result in significant cost savings on acquired assets.
  • The company's board might decide to divest the European assets, which could deleverage the balance sheet and make Clear Channel an even more attractive takeover target.

Miami billboard

No one can be sure what will happen if inflation continues higher, but we do think that Clear Channel Outdoor has a few ways to provide alpha to your portfolio.

CHUYN/iStock via Getty Images

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This article was written by

Matthew Smith profile picture
Follow us on Twitter here: @theinvestar Previously a Trader/Portfolio Manager for a Treasury Office managing anywhere from $10-20 billion (treasury assets, retirement benefits, endowment related funds), currently part of a team that oversees an outside investment manager managing almost $30 billion. Previously the founder of theinvestar.com, LLC. theinvestar.com, LLC was a leading news provider on the potash and uranium mining industries supplying data services, commentary, interviews, investment news, newsletters and quarterly industry publications.

Analyst’s Disclosure: I/we have a beneficial long position in the shares of CCO either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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Comments (13)

The best way to reduce debt is by increasing earnings. Longer term getting rid of the European holdings might not be the best way to go.
Matthew Smith profile picture
@ted lujan maybe not, but based on the market over the last few years and their assets in Europe, disposing of the holding should increase their multiples here in the US.
skoenig613 profile picture
CCO moving strongly today .
Mgt must sell the European division to reduce debt .
If that happens it’s on to the races . Big buyers today .
Smells like something g might happen . Bot some today

Way to kick off the weekend on Friday! Absolutely loving it!

I read a Seekingalpha report last week that said billboards was one of the best inflation hedges out of entire group of reit asset classes, CCO is my favorite and cant wait till an announcement!
Matthew Smith profile picture
@IgorPav LAMR and OUT are REITs, but CCO is not....that is one thing that they could possibly change once they clear up some debt and probably sell European exposure.
@Matthew Smith

Thanks Matt. I hadn't considered that as a possibility. Any idea of what kind of bump up in value they would receive if they traded inline with the others?
the debt is crazy, back when LBO and insane radio consolidation was envogue. Is the debt investment grade?
Matthew Smith profile picture
@justlightyourcashonfire no, the debt is not investment grade...but the assets are worth more than the underlying debt. Their sale of the Memphis? MSA assets a few years back demonstrated that.
CCO just has too much debt. The return on assets are in the tank. Is there any assurance any one is interested in buying the European assets and at what price.
Matthew Smith profile picture
@ted lujan I think price is key. There has been interest in the European assets over the years, but one of those parties has commented in the last few years that the only reason they would buy the company is for the US assets which would be included. There are plenty of buyers out there for these types of assets, but can CCO get the price they want/need to justify the transaction is what it all centers around. If the outdoor ad space can remain strong through 2023, it certainly appears that the company will deleverage simply by having an improving business and should see cash flows increase to give them some more room to maneuver.
@Matthew Smith any chance they get their operations together and run a good business? Is the whole model based on asset appreciation?
Matthew Smith profile picture
@justlightyourcashonfire I think the operating business is well run. Right now they have a lot of exposure to US which is good with strong demand and rising rates, but Europe (their other big exposure) has been a drag and is not seeing the same demand or rising rates.
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