The name, Rural Cellular Corp. (NASDAQ:RCCC), just about says it all. Rural. Cellular. Now, what better place to operate a cell phone company than in rural America? The population density is less than in an urban area, so the customer base is small and you won't attract a lot of competition.

The distances are bigger, too. Bigger distances means more infrastructure. Longer telephone lines to hang and maintain for phone service. Longer cable lines for TV and broadband Internet service. The economics of the geography practically beg entrepreneurs to look for alternatives to the usual way of doing things: providing TV and Internet service by satellite instead of cable, for instance. And providing cell service with a few towers, rather than landline service with miles and miles of poles and wires.

Rural Cellular's story is good. But the business... the business is just plain freakish.

The company turned a small profit for its just-announced fourth quarter and is free cash flow positive. Free cash flow in 2003 was $7.52 per share. At a share price of $10.60, that gives the stock a seemingly ultra-low P/FCF ratio of 1.4. Of course, factor the debt in, and the enterprise value-to-free cash flow ratio is a more normal-looking 21.

However, much as I love the EV/FCF metric as a means of evaluating a company as an investment -- and grateful as I am to Motley Fool Hidden Gems for introducing me to the metric -- EV/FCF should not be relied on to the exclusion of other considerations.

For example, the shudder factor. Rural Cellular has $142.5 million in cash, but this is more than cancelled out by $153 million in preferred stock. Add in the $1.8 billion in long-term debt, and you will see why the business has a book value of negative $44 a share.

When you look at a company with a $130 million market cap, and see that it is carrying roughly 15 times its own valuation in debt, and do not shudder in horror, well... you are a braver Fool than I.

Personally, if I were interested in investing in a telecom, I would be much more inclined to buy name brand Nextel (NASDAQ:NXTL). It has a lower debt-equity ratio, but the same EV/FCF ratio as Rural Cellular.

Motley Fool contributor Rich Smith has no financial interest in either of the companies mentioned in this article.