Recent listing APN Outdoor (APO) looks attractive

Recent listing APN Outdoor (APO) looks attractive. APO is a leading outdoor advertising company in Australia and New Zealand with 27% and 26% market share respectively. APO is a relatively simple business having aggregated a portfolio of billboards around Australia and NZ and selling the advertising space on those billboards to advertisers. We believe that the digitalisation of billboards is a 'game changer' and the company is only three years into a digital roll out plan that could last many years. At present, only 34 sites are digitised out of a portfolio of 632 sites, of which we estimate that up to 200 could lend themselves to digitalisation. APO is achieving EBITDA margins of 40-60% on new digital panels compared with 10-15% margins on traditional static panels. APO is attractively priced, trading on a PE of 14.5 times CY15 earnings and has a fully franked forecast yield in excess of 4%. This looks attractive given the strong NPAT growth which is forecast to exceed 25% in both CY14 and CY15. Monthly report here: (VIEW LINK) (disclosure: OCFunds own APO shares)