Print

Email story

Comment

Email editor

Talk of the Bay

Knology is the stock pick to click

By LOUIS HAU
Published May 29, 2006

After two years in the doldrums, Knology Inc.'s stock finally appears to have caught the fancy of Wall Street.

The West Point, Ga., cable TV company's stock price hit a 52-week high of $10 a share on May 15 before profit-taking brought the stock down to a close Friday of $8.43. That's still more than double its 2005 closing price of $3.84 a share.

Knology's shares have been buoyed by the company's refinancing of $305-million in debt last year and strong customer growth in its markets throughout the Southeast, said Tavis McCourt, an analyst for Morgan Keegan & Co. in Nashville.

McCourt has an "outperform" rating on Knology's stock. Morgan Keegan was an underwriter of Knology's initial public offering in 2003.

Investors have been encouraged by the stabilization of Knology's operations in Pinellas County, which it acquired at the end of 2003 from Verizon Communications. The Pinellas business hemorrhaged cash early on as Knology purged its rolls of outdated discounts and delinquent accounts and invested in system improvements to begin rolling out phone service in 2004.

Knology isn't profitable in Pinellas County, but the recovery on its operations has been a major plus in the eyes of Wall Street, McCourt says.

"Now that Pinellas is no longer bleeding cash, investors can actually see the growth that's going on in the other markets," he says.

[Last modified May 29, 2006, 06:05:38]