(MONEY Magazine) – INFINITY BROADCASTING INF; NYSE, $33.25; NO YIELD

Often overshadowed by the glamorous cable and cellular industries, radio broadcasting is re-emerging as one of the fastest-growing media sectors. Radio shares are up an average 48% this year, thanks in part to the expectation that the FCC will remove the 40-station ownership limit on broadcasters by fall and to bustling merger activity in the industry. Among these stocks, the best positioned is Infinity Broadcasting with its $700 million line of credit and 27 stations in 13 of the nation's top radio markets, including New York and Los Angeles.

Granted, many would consider New York-based Infinity (1995 projected revenues: $373 million) untouchable. It owns the Howard Stern, Don Imus and G. Gordon Liddy talk shows, which delight and disgust listeners nationwide. Infinity has successfully exploited such programming to become the largest and most profitable radio group in the U.S. Edward Hatch, an analyst at UBS Securities, expects the company to boost net earnings 51% this year from last year's $33.2 million and come up with another 48% increase for 1996.

Unlike its hotheaded hosts, Infinity's strategy is coolly reasoned. Since 1973, it has grown from a single station, WBCN in Boston, by acquiring and turning around laggard properties in large media markets where advertising budgets are biggest. For example, in 1991, Infinity bought New York City's No. 2-rated WFAN for what seemed an exorbitant $70 million. Three years later, WFAN was the highest-billing station in the city, generating around $35 million in annual revenues from advertisers. Now the station is said to be worth more than $100 million.

Infinity principally targets the lucrative 25- to 54-year-old male audience and hires talk show personalities with enough name recognition for national syndication. The company also profits from its 24% share of Westwood One, the nation's leading syndicator of radio programming. Shock jocks like Stern, of course, tend to attract lawsuits. But analysts deny that such suits are a big deal. "Stern brings in many times over what he might cost in attorneys' fees," says Hatch. He anticipates that the stock will reach $47 in the next 18 months, a 41% jump from here.

--Jeanhee Kim