Cox Radio, Inc. (CXR)

418 p/e ratio for a RADIO company!!!!!!!!!!!!!!!!!!!!!!!

From my short ideas/valuation screen

How can you be successful in radio if some of your stations are country formats. Your stock will rock-and-roll when you do.

Cox radio, a subsidiary of Cox Enterprises is a radio broadcasting company in USA which owns and operates 79 radio stations in 18 markets with majority of their stations located in Sun Belt states. In 2006 national advertising has accounted for 22% of revenues while 70% came from local advertising.

The radio industry is being looked at with some skepticism by investors, as radio advertising is expected to grow by only 1% over the next five years, compared to the earlier forecast of 2%-3%, which will severely affect advertising rates. Additionally, the emergence of the World Wide Web as a medium of advertising has lead to many advertisers turning their backs on conventional channels of advertising like the radio. The bad news does not end here. With the advent of satellite radio, steaming internet radio and new technologies like Ipod and mp3, terrestrial radio is likely to face a decline in terms of listeners. These trends seem to be reflected in Cox Radio’s revenues in 2006 which is down slightly due to decline in both national and local revenues. Their online revenues have increased 48.3% but unfortunately this accounts for only 2% of revenues.

The company has announced tentative plans to fortify its online operations as its online revenues on the rise, quarter after quarter. Revenues in the fourth quarter are expected to be strong, mostly due to political revenues while the core growth remains flat. Additionally operating expenses during 2007 is also set to rise by $6 million thanks to an amendment to a pension plan. As the radio industry continues to face rough weather, it looks Cox radio will have a tough year ahead.