Dear Value Investor,
I got a couple of stock ideas, both value stocks, from Steve Eisman: The first was for Charter Communications, Inc. (CHTR). In his recommendation he posted the below chart showing the company's FCF estimates from 2025 out to 2029 from a boutique stock evaluator, Moffett & Nathanson, just slightly above the general consensus of others who follow it. See below:
Charter
Communications | FCF per Share | Growth | FCF Yield | | 2025 | $32 | 22% | 14% | | 2026 | $38 | 19% | 17% | | 2027 | $67 | 77% | 30% | | 2028 | $ 105 | 56% | 47% | | 2029 | $ 121 | 15% | 54% | | | | | | | Source: | Moffett | & | Nathanson |
This is a position he purchased in January this year. This is a cable company whose problems he mentioned are well known. The New Story per Eisman: Most of these companies are losing customers as they cut the cord and losing broadband subscribers as well to T mobile, ATT etc. History: Charter reached its peak in $ 821 in Oct. 2021 during covid and now sets at $ 233 this month. The current PE is only 6 today. He knows it is cheap today, but he maintains the story has changed. He mentions that over the last few years it has spent a lot on capex. Here the change in fundamentals.. The capex, it spent 11.7 billion in 2025 and 11.4 billion in 2026, 9.5 in 2027, 7.5 - 8 billion in 2028 & in 2029. The table above give the boutique's FCF analysis. Made possible by it reducing capex, and devoted freed monies to purchase its stocks reducing it to by 50% by 2029 (if shares are purchased at roughly the current price). The charts shows the FCF will change from $32/share in 2025 to $121/share in 2029. So the cut in capex and its massive buyback program is the change in the story. Profit per share has increased 18% over the last year, he says. He notes that in the last qtr. cord cutting has actually disappeared with 44,000 new video subscribers.
I will be to checking this story out and ponder if this value stock will prosper due to its "change in story".
Oh!. another stock he mentioned that he also bought recently is Meritage Homes, Inc. (MTH) now trading at tangible book value. So I will have some homework this weekend. I appreciate your thoughts and invite them on these tips. Here is the link for Eisman's commentary: youtube.com.
Coolwire |
