We are completing our review of the US public out of home companies by reviewing Link Media Outdoor which is a wholly owned subsidiary of Boston Omaha.  Boston Omaha stock finished yesterday at $16.08.  This is above the $13 price at which it went public in 2017 buy a long way off the company’s $46.98 peak in February 2021.  Billboard Insider suspects the slump is due to investor concerns over the performance of Boston-Omaha’s insurance, broadband and real estate assets.  Link Media Outdoor has shown steady improvement for the past 6 years and we expect this to continue in the fourth quarter.  Our thoughts.

• Link Media watches expenses.  Revenues have grown faster than expenses every year since the company’s inception.  Lease costs have been declining and are now 19% of revenue.  You can also see tight expense control in Link’s headcount.  Revenues have almost tripled over the past five years yet Link’s employee count has been constant.
• Improving cashflow margin.  Link’s cashflow margin (EBIDTA/Revenue) has grown from 6% in 2017 to 37% for the first 9 months of 2023.  That’s better than Clear Channel Outdoor (21% cashflow margin) and OUTFRONT (25% cashflow margin) but Link still has a ways to go to catch Lamar’s 45% cashflow margin.
• Classic small market roadside billboards.  Link is in lots of small markets.  This is evident in the fact that the company is generating approximately $430/face in revenue each month.  There are no transit, street media or place based assets.
• Occasional acquisitions.  Assets grow rapidly every couple years due to acquisitions.  Net assets increased from $31 million in 2017 to $178 million 2018.  Net assets increased from $139 million in 2020 to $166 million in 2021.  Then the company takes a year or two to integrate assets and heads back to the acquisitions market.

Here are the numbers.

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