Tom Gayner - Cable One

[ValueMaven]

Tom Gayner just bought $6.6M worth of Cable One at prices in the mid-$650 range.  Gayner has sat on the board for a long period of time. 

This is a meaningful and sizable purchase.

[CorpRaider]

$6MM of CABO and $60K of MKL.

[no_free_lunch]

For reference, what is the portfolio size?  At first glance, I'm not sure that is a meaningful amount.

[Ross812]

18 hours ago, no_free_lunch said:

For reference, what is the portfolio size?  At first glance, I'm not sure that is a meaningful amount.

 

Increase of 85% of MKLs CABO holdings. It's less than 1% of Markel's 6.7B portfolio. 

[ValueMaven]

Results were not terrible recently - but the space is totally out of favor.  They keep buying back stock.  

It's really interesting to see how this whole space has gone out of favor over the past several quarters.

[Red Lion]

59 minutes ago, ValueMaven said:

Results were not terrible recently - but the space is totally out of favor.  They keep buying back stock.  

It's really interesting to see how this whole space has gone out of favor over the past several quarters.

Do you have other recommendations in the sector? I’ve read about these cable companies for years but never opened a position (yet). 

[ValueArb]

23 hours ago, ValueMaven said:

Results were not terrible recently - but the space is totally out of favor.  They keep buying back stock.  

It's really interesting to see how this whole space has gone out of favor over the past several quarters.

 

As a shareholder, isn't this what you like to see? Stay out of favor and cheap to maximize your gains from the buybacks?

[ValueMaven]

15 hours ago, ValueArb said:

 

As a shareholder, isn't this what you like to see? Stay out of favor and cheap to maximize your gains from the buybacks?

 

Yes - agreed.  The pace of buybacks has been really interesting given the decline in the stock.  Capital allocation here is the best in the group IMHO ... 

[wabuffo]

Its not just the buybacks.   They used their (likely) overvalued stock during the pandemic to help finance their largest acquisition - Hargray Communications at over $2B.   They issued stock but also issued almost $1B of 0% & 1.125% convertible notes (the convert price = $2275.83 lol).  

 

Overall, $1.57b of debt termed out to 2026-2030 at an average interest rate of 1.9%.

 

I mean this is just super-smart management of the capital allocation function here.

 

 

Bill

Edited February 28, 2023 by wabuffo

[changegonnacome]

6 hours ago, wabuffo said:

I mean this is just super-smart management of the capital allocation function here.

 

Your right - its just beautiful.......think of the no FCF tech entities that were handed debt and equity life vests in 2021 & early 2022 and said "no thanks".......by choosing not to issue new shares or debt...... pure capital allocation criminal negligence!

 

Edited February 28, 2023 by changegonnacome

[ValueArb]

10 hours ago, wabuffo said:

Its not just the buybacks.   They used their (likely) overvalued stock during the pandemic to help finance their largest acquisition - Hargray Communications at over $2B.   They issued stock but also issued almost $1B of 0% & 1.125% convertible notes (the convert price = $2275.83 lol).  

 

Overall, $1.57b of debt termed out to 2026-2030 at an average interest rate of 1.9%.

 

I mean this is just super-smart management of the capital allocation function here.

 

 

Bill

 

This site really needs a way to upvote posts.

[Seanzy]

I was thinking the same thing about this post.