Clear Channel Outdoor (CCO), mcap=$863m, price $1.81 vs $1.34

Clear Channel Outdoor – the second largest out-of-home advertising company globally behind JCDecaux. Constantly trades at a discount to its US pureplay peers $LAMR and $OUT, partially due to high leverage. Catalysts for change – divestment of European business + undergoing industry/company transformation towards digital out-of-home advertising. The long-term growth and profitability profile is vastly underestimated due to a poor understanding of this transformation. Although only 4% of display inventory was converted to digital, digital revenue already represents 35% of the total. 20-40% IRR on each conversion with a very long runway ahead. Highly levered equity stub, but no maturities till 2025 and no covenants.