Symbol (NYSE): CCU
52-Week Range: $95.50-$57.88
52-Week Range: $95.50-$57.88 Price on May 9: $69.63
52-Week Range: $95.50-$57.88 Market Capitalization: $24 billion

After nearly a decade of remarkable growth, shares of San Antonio-based Clear Channel Communications—soon to be the nation’s largest radio station operator and one of America’s largest media companies—have lost about a quarter of their value since January, creating a buying opportunity for investors. Of the eighteen equity analysts tracked by Zacks Investment Research, fourteen list CCU’s shares as a “strong buy” (the other four list them as a “moderate buy”). “It’s rare that you get an opportunity to look at CCU at such a low price level,” says James C. Goss, a senior investment analyst with Barrington Research in Chicago.

What’s depressing Clear Channel’s share price? Investors seem to be worried that 1999 will be a tough act to follow. Radio advertising was the brand-building mechanism of choice for dot-com companies, and major-market players like Clear Channel benefited enormously. But recent interest rate hikes (five moves of a quarter point each since last June) and concerns that a slowing economy could cause ad spending to dry up have hurt radio stocks as a group this year (other radio companies whose share prices are down include Infinity Broadcasting, Cox Radio, and Emmis Communications, the parent company of Texas Monthly).

Uncertainty over two pending mergers hasn’t helped. In late February Clear Channel announced that it was buying SFX Entertainment, the world’s largest promoter of concerts and other live events, for about $4.4 billion in stock. The deal will make Clear Channel a major force in the music and sports business, but judging by the market’s reaction—shares of CCU dipped 11 percent when the news broke—investors fear the company is straying too far from its media expertise. (It’s worth noting that investors balked when Clear Channel began acquiring businesses that sell billboard advertising, which have thrived under new management.)

A few months earlier Clear Channel announced it would acquire radio broadcaster AMFM for $16 billion in stock. When the deal closes later this year, the company will own 874 stations, meaning it will reach nearly all the markets in which SFX has a presence. The radio-concert connection, solidified by Clear Channel’s extensive TV and billboard holdings, will create ample opportunities for cross-promotion and streamlined ticket sales.

Robust growth in revenue and after-tax cash flow in the first quarter of 2000, plus high demand for billboard advertising, are strong signals that there are good times ahead for Clear Channel. “We’re strategically aligned for growth,” says Lowry Mays, the company’s chairman and CEO. He’s paid to say that, of course, but he happens to be right: At current prices, CCU shares are ripe for the picking.