From War Games To Wall Street Winners: A Turnaround Tale For ETM

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Trained as a scientific programmer, Bill Zettler worked on war game software for NORAD (North American Air Defense) and statistical software for Abbott Labs. But, for most of his now-concluded 40-year career, Zettler developed and sold financial and accounting software. He even penned a book on public pensions.


Now, the retiree is a contributor to Wall Street blog Seeking Alpha, focused on “deep value” opportunities for investors.

And, he’s high on Entercom Communications.

Noting how Entercom is one of the largest radio broadcasting companies in the U.S., Zettler says, “Radio is still alive and well with podcasts, sports coverage, and local news outlets, besides other things.”

He then dutifully notes, as many industry leaders repeatedly have over the last several years, radio’s weekly reach — but uses Q2 2018 data to illustrate his point.

Still, the radio business, and Entercom’s model, which includes podcasting, is what excites Zettler.

According to management, things are picking up at Entercom.

That leads Zettler to share five reasons why one should buy “ETM” now.

With shares at $1.43 as of 1:30pm Eastern, here’s what Zettler has to say about investing in the company:

  • The power of radio during crises. Zettler took note of ratings increases at all-News KNX/Los Angeles, WINS/New York and WBBM-AM/Chicago; the stations, like others with higher shares in Nielsen Audio surveys, benefited from higher Time Spent Listening from a smaller group of total listeners across the height of the COVID-19 pandemic.
  • Operating expenses were cut by $80 million in the second quarter, and Entercom expects $150 million for the year.
  • Entercom is the second-largest podcast producer in the U.S. “This is a valuable and rapidly growing part of digital broadcasting which grew at 44% in Q2 in spite of COVID-19,” Zettler says.
  • If April was indeed the low point of the year, then future results should rebound convincingly. Zettler says, “Think of all the businesses starting up again and their need to build revenue back up. Advertising will certainly be one of the prime ways to achieve that goal.”
  • ETM took the full brunt of the pandemic reaction. But, “now is the time to start building that traffic back up and that should benefit ETM meaningfully over the next 6-12 months.”

What is Zettler’s final conclusion?

“Entercom has done an admirable job dealing with the business problems associated with the pandemic,” he says. “Cutting expenses, expanding quality podcast material, working with customers even though they may have temporarily cut back, or even stopped buying from Entercom, have all enhanced ETM’s probability of recovering in full.”

As such, Entercom stock is, in his view, a “strong buy” with a price target of $3 by the end of 2020 and $5 by the end of 2021.

“Entercom is a buy because it remains a viable, solid company that has dropped too far, too fast,” Zettler concludes. “I think they will ‘Turnaround’ and succeed over the next 6-18 months. ETM is a buy under $1.50.”


Entercom Communications will report its 2020 second quarter financial results before the market opens on Friday, August 7. The company will host a conference call and simultaneous webcast at 10am Eastern that morning to review the results and “recent progress against its strategic initiatives.”