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It looks like Cablevision Systems Corporation (NYSE: CVC) is starting to get-it-in-gear. Hence, I'm reiterating my Buy rating for CVC, first recommended on May 29, 2009 at a price of $19.03. If you purchased CVC then, you're up about 30%. Even ignoring the potential spin-off of sports arena Madison Square Garden, Cablevision's positives have always been compelling: fifth-largest cable t.v. operator (about 10.4 million revenue generating units), with a strong presence in a lucrative market (New York City area, 3.1 cable t.v. subscribers); included in that are about 2.8 million premium cable t.v. subscribers, called iO Digital; nearly 2.5 million high-speed internet subscribers; and 1.9 million internet voice (telephone) subscribers.
Historically, a major impediment to better days has related to customer service, but CVC has made strides to improve performance in that critical category. Provided that trend continues, CVC's cable revenue streams offer investors the opportunity for a superior upside, with only modest risk -- not a bad bargain under these economic conditions.
The Sell/Stop Loss has been raised to $19, or to just below the entry point, from $8. The First Call FY2009/FY2010 EPS estimates for CVC are 99 cents to $1.46.
Stock Analysis: Cablevision is a moderate-risk stock. If you've already purchased the company's shares, hold them. If not, consider buying a 25% position in CVC 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 CVC position before December 2009. Sell/Stop Loss if you were to buy shares in this company: $19.
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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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