Comcast Down on Q4 Release

Comcast has been repurchasing shares and recently increased its dividend by 40%, but that hasn't helped the stock much. It's been weak the last month or so, and is in fact down this afternoon on the earnings news.

I think the market wants to see better growth in the top line, as well as more excitement in operational cash flow. As we all know, Comcast is looking forward to receiving regulatory approval for its proposed transaction with General Electric's (GE) NBC Universal.

I'm not a huge fan of Comcast utilizing NBC Universal for future growth, but since this seems to be the future course for the cable entity, I'll try to keep a positive outlook. The key will be for management to leverage its distribution system to uncover new opportunities for extracting value from content libraries. To do this, Comcast must attempt to charge for as much programming as it can. Don't just throw NBC Universal's portfolio up on the on-demand platform for free; as tough as it is to get subscribers to pay extra for stuff, this is exactly what execs must do. If content is to remain valuable, then it must come with a premium (see this piece about Hulu.com).

NBC Universal can be a great asset if it is handled correctly. Unfortunately, deals like this are tough ones to make good on. If you believe this was an example of a genius strategy, then Comcast would be a buy. As for myself, I'll be staying on the sidelines, mostly because of recent price action in the shares.

Disclosure: I own GE; positions can change without notice.