Readers of this space know that the investment bias is toward large-cap companies with demonstrated business models and who have a competitive advantage in established markets. And with the aforementioned in mind, Comcast Corporation (NASDAQ: CMCSA) is worth a review. In general, analysts see Comcast's revenue increasing 7-9% in FY 2009, including accounting for basic subscriber attrition/loses. Local advertising trends are bearish, but look for Comcast to continue to score gains in video services, commercial data, and phone customers.
Other positives: a large cable t.v. subscriber bases (24 million), decent balance sheet, and financial flexibility position the company against unexpected credit market stress, and cost containment is adequate.
To be sure, competition from phone companies and satellite t.v. operators poses credible competition, but thus far Comcast has bested its rivals, due to product superiority and superior new services, such as video on demand. The First Call FY 2009/FY 2010 EPS estimates for CMCSA are 98 cents to $1.12.
Stock Analysis: Comcast is a moderate-risk stock. Consider buying a 25% position in CMCSA now; then buy another 25% in three months, if U.S. economic conditions don't worsen substantially. Under any circumstance, don't buy more than 50% of your CMCSA position in the first half of 2009. Sell/Stop Loss if you were to buy shares in this company: $8.50.
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Disclosure: Lazzaro has no positions in stocks, but does own shares in two Pimco Bond Funds: PHDAX and PYMAX.
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Reader Comments (Page 1 of 1)
4-23-2009 @ 4:43AM
swapna said...
Who are the biggest competitors for Camcast? If Camcast's main business is about high speed internet & telephone cables, it shouldn't face competition from phone companies given that only the cable producing companies can give companies.
I think this stock will stay relatively safe in the meltdown because the market for internet usage hasn't come down drastically. But keep it safe as the next melt down is sure to come..
thanks,
swapna
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