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Strategies & Market Trends : Value Investing
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To: E_K_S who wrote (22637)12/3/2005 12:08:43 AM
From: Spekulatius  Read Replies (3) of 78719
 
CMCSA and DTV -
CMCSA might be OK based on the value criteria, With respect to Comcast's "huge FCF" , i consider "huge" relative a number. With it's current market cap the FCF yield is less than 5%, which is OK but not extremely cheap. With the heavy debt load, there is also a risk that higher interest rates may hurt.

I admit that DTV's metrics look worse than CMCSA's in some respects. FCF and earnings just turned positive and are still moderate, but i think they should be able to earn a FCF of 500M$ this annualized - however while Comcast subscribers are stagnant DTV will add about 1.2M subscriber annually. With an acquisition cost of more than 600$/subscriber (which is expended right away contrary to DISH, which capitalizes the cost!) that's at least 600M$ in expenditure that would go away of DTV's subscriber # were to remain constant. In other words, DTV should see a gusher of cash if growth starts to slow and with net cash on the balance sheet i suspect that shareholders should be rewarded with dividends and buybacks. Also on a EV/subscriber valuation beats the Cable stocks by far and DISH by 20%. I acknowledge that the cable companies have the better pipe for value added service but i don't care as long as DTV and DSIH continue to gain subscriber with old fashioned TV.

Anyways, i am in for a starter position and not opposed to add more.
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