Seeking Alpha analyst Dallas Salazar very much likes what he saw out of radio-based local multimedia operator Townsquare Media during the fourth quarter of 2014, and is also expecting to see even more good things from the company.
What’s more, Salazar sees good things in both the short and the long term.
“I continue to be bullish TSQ’s strategy across all durations,” wrote Salazar. “Townsquare Media is going to shake things up a bit while continuing to be aggressive into 2015 and I couldn’t like that style of management more. I’m going to remain long TSQ after review of Q4 financials and after a strong call solidified the mid-term strategy.”
With a $50M revolver at its disposal, the company will have ample funding for M&A action. Add to that income from stocks. Salazar said the latter could go to reducing leverage but believes that purpose will be put on the back burner in favor of bringing in more assets. Since Townsquare has been investing in strong cash-flowing properties, it should be able to move quickly on deleveraging down the road, suggested Salazar.
Salazar very much appreciates Townsquare’s focus on being a strong player in small markets. He notes that it is a strategy that doesn’t make sense for some companies which lack a strong small-market presence, and says spin-offs from companies refocusing on larger markets could provide new growth opportunities for Townsquare.
Bottom line: Salazar recommends taking a long position with Townsquare stock.
