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Technology Stocks : John, Mike & Tom's Wild World of Stocks -- Ignore unavailable to you. Want to Upgrade?

To: John Pitera who wrote (1750)	8/18/2000 3:09:29 PM
From: wlheatmoon	Respond to of 2850

Thursday August 17, 7:31 pm Eastern Time Cable stocks up on analyst's bullish sales outlook By Jessica Hall NEW YORK, Aug 17 (Reuters) - Shares of Charter Communications Inc. (NasdaqNM:CHTR - news) and other cable television companies jumped on Thursday after a Morgan Stanley analyst said he expects the sector's revenue growth to accelerate in 2001 due to growing sales of new services. The cable industry's revenue growth will increase to 11-13 percent in 2001, up from the 8-10 percent growth expected in 2000, Morgan Stanley analyst Richard Bilotti said in a research report. ``Entering the second half of 2000, we see positive trends in the cable sector and we now believe the group is broadly undervalued,'' Bilotti said in the report. Cable stocks had been depressed throughout the first half of the year on investors' concerns that subscriber growth may slow due to competition from satellite television services. Bilotti previously had taken a cautious stance on the cable industry due to the threat of competition. His more positive tone on Thursday helped give the cable stocks a boost, traders said. Shares of Charter, the cable TV company controlled by billionaire Paul Allen, gained 2-3/16 to 16-1/16 in heavy trading on Nasdaq. Comcast Corp. (NasdaqNM:CMCSA - news) added 2-5/16 to 38-7/8 and Insight Communications Co Inc.'s Class A (NasdaqNM:ICCI - news) shares jumped 2-1/16 to 16. Traders attributed the stocks' rise to Bilotti's research report. Bilotti said he expects the cable industry to benefit from growing sales of digital television services, which feature hundreds of programming channels, and cable-based modems. A broader roll-out of digital-TV will help the cable companies retain customers and more successfully compete against the satellite TV firms, he said. Customer turnover, or churn, typically slows when subscribers buy more than one service from a company. Greater customer retention could allow the cable companies to raise basic rates by 4-5 percent, rather than the 3-4 percent rate increases that were previously expected, Bilotti said. He did not provide a specific time frame for the expected rate increases. ``The data and video bundle, once deployed, will allow (cable firms) to increase price levels without losing subscribers,'' Bilotti said. Charter, the No. 4 U.S. cable TV company, could have 799,000 digital-TV customers by year-end, about 30 percent more than previously expected, Bilotti said. The push into new services, however, should keep the cable companies' 2001 capital spending at current levels. The investments in new services could delay many companies from turning free-cash flow positive, he said. The capital spending ``is not necessarily a negative, however, as increased investment in new services will likely increase shareholder value and return on investment levels over the longer term,'' he said. Shares of Adelphia Communications Corp. (NasdaqNM:ADLAC - news) gained 3-1/4 to 34-1/4 on Nasdaq. Cablevision Systems Corp. (NYSE:CVC - news) added 1-7/8 to 70-1/4 and Cox Communications Inc. (NYSE:COX - news) gained 1/2 to 37-1/2; both stocks trade on the New York Stock Exchange.