Tuesday, January 14, 2025
Saga Communications, Inc. is a broadcast company whose business is primarily devoted to acquiring, developing and operating radio stations. Saga currently owns or operates broadcast properties in 27 markets, including 79 FM and 33 AM radio stations. Saga’s strategy is to operate top billing radio stations in mid sized markets, defined as markets ranked (by market revenues) from 20 to 200. Saga’s radio stations employ a myriad of programming formats, including Active Rock, Adult Album Alternative, Adult Contemporary, Country, Classic Country, Classic Hits, Classic Rock, Contemporary Hits Radio, News/Talk, Oldies and Urban Contemporary. In operating its stations, Saga concentrates on the development of strong decentralized local management, which is responsible for the day-to-day operations of the stations in their market area and is compensated based on their financial performance as well as other performance factors that are deemed to effect the long-term ability of the stations to achieve financial objectives. Saga began operations in 1986 and became a publicly traded company in December 1992. The stock trades on NASDAQ under the ticker symbol “SGA”.
Michael Kupinski, Director of Research, Equity Research Analyst, Digital, Media & Technology , Noble Capital Markets, Inc.
Jacob Mutchler, Research Associate, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
Recent weak stock performance. The SGA shares are down roughly 24% over the past six months and nearly 50% over the past year to near current levels. The performance is in line with its peer group, which is down approximately 45% over the past year. We believe that investors have thrown the baby out with the bath water, given that SGA has virtually no debt, unlike its highly debt levered peers, and has better revenue and cash flow growth potential.
Increased stake. Given the recent stock performance, Gate City Capital Management, LLC, a micro-cap focused investment firm, announced on January 8 that it nearly doubled its position during December 2024. Gate City Capital Management, LLC now owns 863,845 shares or approximately 13.8% of the total outstanding shares.
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*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision.