It's a difficult call, but I'm Reiterating my Buy rating for Comcast Corp. (NASDAQ: CMCSA), first recommended on April 22, 2009 at a price of $14.05, Comcast posted a decent rebound in subscriber growth in Q3, but concerns about intensifying competition in cable television, broadband, and advanced video services persist. In particular broadband competition from telephone/telecom companies, who are offering cheaper DSL services represent the biggest threat. Moreover, as these telecom companies build-out fiber-based video and broadband services, they'll begin to chip away at Comcast's (and other cable companies') conventional cable television services.
For institutional investors, and yours truly, to stick with the stock, Comcast will have to demonstrate a technology-competitive, affordable response to the telecom broadband/t.v. threat. The First Call FY2009/FY2010 EPS estimates for CMCSA are $1.15 to $1.19.
Technically, Comcast's stock chart has straddled the key, 50-day moving average for about nine months, which is indicative of institutional investor hesitancy/indecisiveness.
Stock Analysis: Comcast Corp. is a moderate-risk stock. If you've already purchased the company's shares, hold them. If not, consider buying a 25% position in CMCSA now. Under any circumstance, don't buy more than 25% of your CMCSA position before December 2009. Sell/Stop Loss if you were to buy shares in this company: $8.50.
Disclosure: Lazzaro has no positions in stocks, but does own shares in two Pimco Bond Funds: PHDAX and PYMAX.
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