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Some have asked how I could invest in the Washington Post Co. I deserve mocking and shame, as I liked it above $700 several years ago and have been very wrong -- the stock is now about $390. I temporarily sold out of the stock last year due to the availability of so many other cheap stocks, but decided to repurchase later that year as many stocks had risen while WPO was down/flat. Anyone who hears me mention the name groans (i've often found that a sign of a great future investment) because it's so hated).

A Bloomberg article tonight states that Charter communications (Chtr) is buying cableVision's (CVC) Optimum West (the old Bresnan broadband)for $1.63b, equating to 8.9x annualized Q3 EBITDA and $4,444 per sub (based on 360K basic subs).

Based on the EBITDA valuation, Washington Post's Cable One would be worth $2.6b (8.9x annualized q3 EBITDA of $288mm). Using value/sub, Cable One would be worth $2.9b pre-tax. Not too bad when the Washington Post overall is valued at $2.9b with a $2.6b enterprise value. That means the education biz, TV stations, real estate, online assets, and overfunded pension are all free... and the cash flow is buying back stock cheaply and providing a nice dividend. I just can't pass it up when so many other investments in the market are fairly to overvalued.

Of course, there's no indication that Washington Post will monetize this asset, this valuation figure is pre-tax, and cable is pretty hot right now (i.e. this valuation may not be sustained). I absolutely could continue being wrong, but am happy to have a chunk of capital deployed in WPO at this juncture.

http://www.bloomberg.com/news/2013-02-07/cablevision-said-ne...
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