Outdoor advertising - A risk we’ve raised before

Today’s movements in the outdoor media sector highlights the importance of not overpaying for a company, no matter how good the business. Whilst APN Outdoor today delivered a highly credible result (and is a quality business), the shares have fallen 33% due to forecast revenue growth falling slightly below market expectations. A 33% fall in share price due to a 2% miss in revenue might seem like an overreaction, but in the context of the huge share price run over the past twelve months it is perhaps not that unsurprising. As Ben Graham said: “In the short run, the market is a voting machine but in the long run, it is a weighing machine.” In May this year, we discussed this risk with Livewire and you can revisit the commentary in the video below: