Bear Stearns initiated coverage of Capital Cities/ABC Wednesday with a buy recommendation, citing the company’s investments in cable programmers and European ventures as well as improving fundamentals. CapCities/ABC shares closed $ 3.75 higher at $ 718.75.“They are very forward-looking (with) investments in growth markets overseas, ” said analyst Matthew Harrigan, who follows ABC for Bear Stearns. “There are more (opportunities) there than in the relatively mature North American market.” Harrigan said the broadcaster’s stakes in Lifetime, Arts & Entertainment and its overseas investments — including a 21% stake in Scandinavian Broadcast System — represent between $ 85 and $ 100 per share in equity value that is not currently reflected. Diversification He also attributed CapCities/ABC’s bullish prospects to an improving advertising market, successful new programming and cost-cutting efforts on sports contracts in addition to new projects involving CD-ROM and videogames. Harrigan expects CapCities/ABC to earn $ 36.49 per share this year and $ 42. 39 in 1995 on a pre-split basis. The company said last week, pending shareholder approval, it will split its stock 10-for-one following a May annual meeting. It earned $ 27.79 per share after a charge of 74 cents per share in 1993. “If you look at it on a cash earnings basis, it’s a pretty good story,” he said. “With fin-syn going away in two years, CapCities will remain a first-tier media player through internal development without needing a merger with a studio or a King World.” Fit for a King World? Constant speculation has paired CapCities/ABC with “The Oprah Winfrey Show” distributor King World Prods. Separately, King World said Wednesday it restarted its program to buy back up to about 1.235 million shares of common stock left under the repo plan announced in December 1992. King World had previously approved the repurchase of up to 2 million shares in open market or private dealings. In its fiscal year ended Aug. 31, 1993, King World bought back 765,200 shares on the open market. King World closed up 38 cents at $ 39.88 per share.