On a day where most stocks are trading deep in the red, oOh!Media Ltd (ASX: OML) have soared more than 11% to $3.90. They rose as much as 14% to an all-time high of $4.00 per share earlier in the session.
By comparison, rival APN News and Media Limited (ASX: APN) fell 2.9% while the ALL ORDINARIES (Index: ^AXAO) (ASX: XAO) is down 1.2%.
Who is oOh! Media?
oOh!Media is Australia's largest Out Of Home media company, providing advertisers with access to a diverse range of audiences. It operates a number of digital billboards in shopping centres and airports while it also has contracts for many of Australia's roadside billboards.
Indeed, while a number of Australia's traditional media companies are struggling with slower advertising revenue, out-of-home advertising has recorded strong growth. Various reports suggest out of home advertising can considerably improve return on investment for advertisers, especially when coupled with other in-home advertising methods (e.g. television ads, etc.).
I would also argue that the company will benefit from a growing population. The busier our roads and shopping centres and airports become, the wider audience that advertisers can reach through oOh!Media's advertising locations.
Why are the shares up today?
Today's gains came as a result of an update from the group, announcing the acquisition of Inlink, a market leader in premium CBD Digital out-of-home market (with a network of more than 2,800 digital screens) as well as an upgraded profit guidance.
The company said that the $45 million acquisition is in line with oOh!Media's digital strategy of driving engagement with audiences through digital screens. It will also be immediately earnings per share (EPS) accretive on a pro-forma basis with the acquisition expected to be complete next month.
oOh! Media's CEO, Brendon Cook, said "This cements our position as delivering Australia's largest reaching digital sign network that builds deep engagement between advertisers and their audiences through leading edge innovation and extends the connection beyond physical signs to mobile, social and online environments."
He added that "WiFi enables brands to run responsive interactive campaigns that directly connect with audiences and can engage with them beyond the screen on their mobile device. Furthermore it provides us with more data to help advertisers gain greater insights into their audiences and their purchasing journey."
In the same announcement, the company said it now anticipates its full-year 2015 pro forma earnings (before interest, tax, depreciation and amortisation, or EBITDA) to be between $57 million and $58 million. That compares to previous guidance of $53 million to $55 million, issued as recently as August.
Although the shares have more than doubled in price since last December, I still think they're worthy of a closer look for long-term investors today.
