Telecom Ramblings

Here’s something new to keep you busy.  This spreadsheet tracks various valuation metrics for LVLT, CCOI and TWTC.  I get real-time bond pricing from http://cxa.marketwatch.com/finra/MarketData/Default.aspx and stock quotes from www.yahoo.com.  For each firm there are aspects of their capital structure that are not traded thus there is no market price.  Feel free to put whatever number you want in for those.  I have them at 100% because they would be first in line in case of BK.  Also note that an entire tranche of LVLT *hasn’t traded.*  I’m going to guess that Buffett owns those.  Here are the spreadsheets:

• Interactive version – for those with IE and the office plugin
• Non-interactive version – for everyone else

In terms of insights, I gotta say CCOI is CHEAP!  Move up ebitdas just a tad and you’re at almost 3 times ev/ebitdas.  There was a time when they were trading at 15-20 times!  I would add that CCOI is also the low cost provider.  I will be buying some of that stuff FOR SURE.  I will put out the LVLT model sometime soon, just haven’t gotten around to it.

Folks, not sure where we go from here but these are HISTORICALLY CHEAP valuations.  Keep in mind that CCOI and TWTC have had relatively stable share counts since the telcom depression of 2003 and since then they both have seen there stock price return to those same prices yet their ebitdas has approx. DOUBLED.  Which means they are 50% less expensive than at the BOTTOM of the telcom crash – and they have ZERO refi issues.  I’m really liking the relative value of TWTC and CCOI and they won’t dilute me.  Things are on sale – that’s fo shure!  Get buyin!

Like all of my models, you put in your numbers in the yellow cells.