Boston Omaha Corporation (BOC) is a public holding company that operates in four main business lines: outdoor advertising, broadband, surety insurance, and asset management.

Above all, Boston Omaha is a story of responsible capital allocation. So while it might not seem like the most exciting conglomeration of businesses today, bear with me for some important perspective on the drivers of Boston Omaha’s results.

Boston Omaha’s Link Media billboard subsidiary is currently its largest business. And on the heels of Boston Omaha’s initial public offering in June 2017, growth by acquisition has been the name of Link’s game so far. In 2018 alone the company completed three large billboard acquisitions for a total of nearly $140 million, and — coupled with smaller purchases in 2019 — has increased its structure count by more than 11-fold over the last two years, to 3,000 billboards with 5,600 advertising faces in 11 states.

Blank lit-up billboard next to highway with traffic underneath.

Meanwhile, Boston Omaha also owns small minority stakes in a number of other businesses including regional bank CB&T, homebuilder Dream Finders Homes, and Breezeway, a real estate services platform. As of Boston Omaha’s most recent quarter, the carrying value of these long-term oriented investments stood at just over $43 million.

Next, Boston Omaha is simultaneously building out its surety insurance segment — think surety bonds for “licensed and bonded” contractors — through its General Indemnity Group (GIG) subsidiary. GIG is comprised of Boston Omaha’s licensed carrier, United Casualty and Surety Insurance (UCS), and four surety-only agencies. As it stands, Boston Omaha has consciously deployed significantly less capital in GIG (around $30 million) as management opted instead to seize the opportunity to acquire the “abnormally large” number of billboard assets that came to market in recent years.

But, in late 2018, UCS became licensed to write surety in all 50 states and the District of Columbia, marking stunning progress from being licensed in only nine states when it was acquired by GIG almost exactly three years ago. At this stage, UCS’ primary goal is to streamline its business, reduce overhead costs, and take market share on a national basis from competitors.

Finally — and much in the same way Warren Buffett has famously done for decades with Berkshire Hathaway — Boston Omaha complements the above businesses by putting available and surplus capital to work building a diversified portfolio of bonds and equity securities. Incidentally, Boston Omaha didn’t begin investing in equity securities until early last year; the value of its portfolio as shown in the “marketable equity securities” line of its balance sheet has increased from $0 at the end of 2018 to nearly $53 million last quarter.

Apart from their disclosure that the company invests in “large cap” stocks, however, investors should note that we still don’t know exactly which equities Boston Omaha management has chosen to buy. Only when assets under management exceed $100 million will the company be required to file a Form 13F with the SEC that would disclose the composition of its equity portfolio.