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A Cable Operator Works The Phones

Inside Wall Street


For another undervalued stock with a Newt connection, try Jones Intercable (JOINA). The innovative cable company, which carries Gingrich's class, "Renewing American Civilization," on its continuing-education channel, trades at around 15. But it could be worth almost twice that, according to money manager Scott M. Black, president of Boston's Delphi Management.

Fear of rate rollbacks and competition from telephone companies has cable stocks out of favor. But Jones Intercable has a link with a phone company: Bell Canada International, which has bought 30% of Jones. Since Bell Canada and Northern Telecom are both owned by Canadian company BCE, Jones has good access to technological developments. It also has entree to Britain through its stake in Bell Cablemedia (BCMPY), a British outfit formed last year by Bell Canada, Cable & Wireless, and Jones.

Even in a tough environment, Jones is growing. Cash flow increased 6% in 1994. When Black tallies up the company's $60 million in cash flow, values the cable-TV station at $660 million, throws in Jones's stake in Bell CableMedia and a potpourri of other businesses, and subtracts debt, he arrives at a breakup value of about $25 a share. That's $2.50 less than what Bell Canada paid the company for 7.5 million shares last December. Black has 100,000 shares and is still buying.BY SUZANNE WOOLLEY

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