Boston Omaha (NASDAQ:BOMN) released third-quarter 2019 results early Tuesday. With shares of the billboard and surety insurance specialist falling more than 5% this afternoon before paring its losses to close down 2.3%, it might seem like investors had reason for concern -- that is, until you note Boston Omaha stock rallied more than 20% over the past two weeks leading up to this quarterly review.

Let's have a closer look, then, at how Boston Omaha kicked off the second half, starting with its headline numbers relative to last year's third quarter:

Metric Q3 2019 Q3 2018 Growth

Revenue

$10.82 million

$5.39 million

100.7%

GAAP net income (loss) attributable to common shareholders

$670,000

($1.93 million)

N/A

GAAP earnings (loss) per share

$0.03

($0.09)

N/A

Data source: Boston Omaha Q3 2019 Form 10-Q SEC filing. 

To be clear, a cursory look at Boston Omaha's income statement shows its GAAP net profit this quarter was driven by a combination of increased interest income of nearly $1.3 million from investments in short-term Treasury securities, compared to just under $460,000 a year ago. Boston Omaha also recorded $315,897 in new dividend income from equity securities owned by the company, as well as a $2.8 million unrealized gain on those equity securities that was virtually absent in the same year-ago period.

Zooming back out to the bigger picture, arguably a better measure for Boston Omaha's success is its per-share book value, which increased to $14.47 at the end of the quarter, up slightly from $14.24 last quarter and $14.27 per share at the end of 2018.

Paper and coin currency overlaid by an image of a clock.

IMAGE SOURCE: GETTY IMAGES.

On new (and old) billboard acquisitions, insurance growth

Drilling deeper into the top line, net revenue from billboard rentals grew 91.3% year over year to $7.18 million, driven primarily by three large acquisitions completed over the past year. More recently in late August, however, Boston Omaha's LMSE subsidiary acquired 61 new billboard structures and related assets in West Virginia for just over $6.9 million in cash and 34,673 shares of Class A common stock.

Relatedly, just subsequent to the end of the quarter (on Oct. 1, 2019), Boston Omaha's Link Media Outdoor subsidiary made another smaller billboard asset acquisition in Missouri at a price of just over $1.3 million. As of Nov. 1, 2019, that brought Link's count to roughly 3,000 billboards with 5,600 advertising faces (up from 2,900 and 5,400, respectively, three months earlier).

Meanwhile, insurance premiums earned soared 276% to $3.07 million, led by higher gross written premiums after Boston Omaha's United Casualty and Surety Insurance (UCS) subsidiary expanded its licensing to all 50 states and the District of Columbia. Consequently, insurance commissions revenue fell 44% to $442,824, as agents are able to place more surety bond business through UCS rather than through other carriers.

Finally, "investment and other" revenue more than quadrupled to $131,610, stemming from Boston Omaha's minority investments in other businesses including a homebuilder, a real estate services firm, and a regional bank.

All told, Boston Omaha ended the quarter with total assets of $426.1 million, up from $390.2 million at the end of Q2 and $332.2 million at the end of last year.

Perspective is in order

Remember, Boston Omaha typically doesn't hold quarterly conference calls, as management tends to reserve commentary on the company's progress in these early stages for the its annual meetings and shareholder letters. As a reminder, the most recent annual shareholder meeting was held in June 2019, and last year's (2018) shareholder letter was released this past March.

In any case, this quarter held no big surprises that might otherwise raise the ire of Boston Omaha's long-term-oriented investors. Rather, it outlined a company that -- just as management has repeatedly promised -- is consistently taking advantage of attractive billboard acquisition opportunities while steadily expanding its promising surety insurance operations. In time, I think that should prove to be a recipe for outsized gains for investors.