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The recent addition of Kyle & Jackie O is not the only reason to own APN News & Media

Chris Prunty

QVG Capital

The recent addition of Kyle & Jackie O is not the only reason to own APN News & Media. The stock ought to appreciate as the PE multiple expands to reflect the improved earnings mix. APN recently surprised the market by gaining full control of their Australian and New Zealand Radio joint ventures. This transaction was important for APN as the earnings skew is now 60% radio and Adshel and 40% publishing. Radio & Outdoor assets have traditionally traded on 13-16x PE. APN currently trades on just 8.5x forward earnings. We see further share price appreciation as media analysts who hate the old APN begin to appreciate the change in earnings mix, Radio earnings surprise to the upside, the company uses its significant free cash flow to retire debt and changes to media ownership laws put APN in play.

Chris Prunty
Principal & Portfolio Manager
QVG Capital

Chris Prunty is a co-founder and Portfolio Manager at QVG Capital; a boutique investment management firm specialising in smaller companies. QVG manages money on behalf of high net worth individuals and institutions in a 'best ideas' portfolio of...

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