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Technology Stocks : AUTOHOME, Inc -- Ignore unavailable to you. Want to Upgrade?

To: KW Wingman who wrote (19956)	3/6/2000 9:57:00 PM
From: Maverick	Respond to of 29970

Comcast invested > $1B in ATHM biz.yahoo.com worldlyinvestor.com Sector of the Day Comcast Emerges As Leader in Broadband Age By David H.M. Baker, Columnist. Excerpts follow: Baker is pounding the table about Comcast stock, thanks to the company's broadband plans. You have to own Comcast (Nasdaq:CMCSK - news). This company is one of the best proxies for the tremendous growth in broadband services that will occur over the next decade, one of the most important business trends now in sight. The company's QVC at-home shopping subsidiary, which is the leading e-commerce site in existence in my view, as well as Comcast's vast portfolio of publicly traded communication and Internet companies, offer it further upside potential beyond its own business units. The general public has just in the last year gotten a taste of what broadband will mean in people's lives. The first generation of broadband services involve high speed internet and expanded channel selection, however these services will pale in comparison to what lies ahead for many of these current subscribers. I believe that the cable establishment will ultimately rule in the delivery of broadband to the home. The strength in the cable model is the fact that it can evolve into a true interactive platform. Cable companies can offer bundled services providing television, radio, telephony and Internet services on a single bill, as well as a vast array of interactive services including the selection of programming anytime, real-time streaming video, video telephony, interactive gaming and the ability to create/share your own content. There has been a considerable amount of confusion surrounding the cable sector in the past several months, partly as a result of the success of the Direct Broadcast Satellite (DBS) companies like GM Hughes DirectTV (NYSE:GMH - news) and Echostar (Nasdaq:DISH - news). I don't believe current fears that DBS companies will steal the cable companies' customers will prove founded. First, the satellite is primarily a one-way signal and cannot deliver the full interactivity that cable does, which is what true broadband is all about. Cable and satellite can coexist, but in the end the cable companies will have the upper hand. I believe concerns over DBS are overblown and are creating an opportunity to increase your position in Comcast at these lower levels. [ATHM soly serves Comcast broadband subs] Comcast posted 21% growth in revenues to $6.2 billion and a 26% in expansion in cash flow to $1.89 billion for 1999. In the cable industry cash flow is the preferred metric as these companies generate little in net earnings due to the fact that non-cash deprecation and amortization expenses are so high. Meanwhile, current growth in its customer base is still strong. The company has an overall penetration rate of 4.4% of potential homes, which leaves a considerable amount of upside in this sector. On the digital cable front the company has 515,000 subscribers, which represents an 11% penetration rate and over 84% signing up in the last twelve months. Comcast is just at the beginning of dramatic growth of these two valuable markets. The layering on of the digital and Internet services are very profitable for the cable companies, as most of the initial costs are absorbed by the basic cable service fees. As these companies add additional services the revenue per subscriber increases dramatically and more importantly, much of the sales dollar falls to the operating cash flow line. As I mentioned earlier, I believe that QVC is the unrecognized leader in consumer-oriented e-commerce. Its Internet site, iQVC, is a mirror of its offline, TV-based model. As the broadband infrastructure evolves, iQVC can overlay and substitute for the company's TV platform. QVC generated over $2.8 billion in revenues in the past year, delivering a 39% gross margin and nearly 19% operating cash flow margin. It's a global player with leading-edge distribution centers in such key markets as the US, UK and Germany. The company delivered more than 75 million packages last year, more than L.L. Bean, Amazon (Nasdaq:AMZN - news) and Lands End (NYSE:LE - news) combined. Many investors have not figured out that the logistics is one of the most important elements of a successful e-commerce site. I believe QVC has the best capability in the world in this regard. Comcast has a vast investment portfolio worth $12 billion as of December 31, sunk into leading players in the communications and Internet space, and $1 billion in privately held companies. These investments include more than $1 billion in each of Sprint PCS (NYSE:PCS - news), Internet Capital Group (NYSE:ICGE - news), AT&T (NYSE:T - news), Excite@Home (NYSE:ATHM - news) and smaller amounts in Tivo (Nasdaq:TIVO - news), VerticalNet (Nasdaq:VERT - news), Ticketmaster Online - Citysearch (Nasdaq:TMCS - news) and Wit Capital (Nasdaq:WITC - news).