DooDiligence Posted July 25, 2018 Share Posted July 25, 2018 Buffet retired from khc board recently too. Do these moves mean more flexibility to buy or sell ? Check out Faux Greg Maffei's Twitter posts in relation to this. Thanks, I'd forgotten about that guy. A bit of interesting Sun Valley talk too. Link to comment Share on other sites More sharing options...
Foreign Tuffett Posted July 25, 2018 Share Posted July 25, 2018 Buffet retired from khc board recently too. Do these moves mean more flexibility to buy or sell ? Check out Faux Greg Maffei's Twitter posts in relation to this. Thanks, I'd forgotten about that guy. A bit of interesting Sun Valley talk too. This is a good recommendation, as whoever is behind that Twitter account has an almost encyclopedic knowledge of all things Liberty/John Malone. Sometimes the real Greg Maffei (@gregmaffei) will even engage with him, which is both "meta" and hilarious. Link to comment Share on other sites More sharing options...
Liberty Posted July 25, 2018 Share Posted July 25, 2018 https://weitzinvestments.com/resources/documents/Literature_and_Publications/Commentary/2018/AnalystCorner_CharterCommunications.pdf?1532449650001?dtr Weitz on CHTR, found via @BluegrassCap Link to comment Share on other sites More sharing options...
scorpioncapital Posted July 25, 2018 Share Posted July 25, 2018 I'm unable to think of a more disfavoured USA / EU sector as broadband companies. Do you think governments globally will subsidize a large part of 5g development similar to alternative energy , solar, clean energy? Link to comment Share on other sites More sharing options...
Liberty Posted July 25, 2018 Share Posted July 25, 2018 I'm unable to think of a more disfavoured USA / EU sector as broadband companies. Do you think governments globally will subsidize a large part of 5g development similar to alternative energy , solar, clean energy? By "disfavoured", do you mean "out of favor/unloved", or do you mean "disadvantaged"? Link to comment Share on other sites More sharing options...
HalfMeasure Posted July 25, 2018 Share Posted July 25, 2018 Do you guys think the weakness today from the Malone news, or from the telecom weakness caused by AT&T? Or any competing explanations? Not endorsing either of the first two as logical. Link to comment Share on other sites More sharing options...
scorpioncapital Posted July 25, 2018 Share Posted July 25, 2018 Liberty - remains to be seen and my crystal ball is broken ) Link to comment Share on other sites More sharing options...
Liberty Posted July 25, 2018 Share Posted July 25, 2018 Liberty - remains to be seen and my crystal ball is broken ) I didn't mean how it'll turn out in the future, I meant when you wrote the first sentence of your previous post, what idea did you have in mind when you wrote that word. I think it changes the meaning of your post, and I'm wondering which you meant. Link to comment Share on other sites More sharing options...
undervalued Posted July 25, 2018 Share Posted July 25, 2018 I think it's because of articles saying it'll be faster cord cutters this year than expected. https://techcrunch.com/2018/07/25/u-s-cord-cutters-to-reach-33-million-this-year-faster-than-expected/ Link to comment Share on other sites More sharing options...
scorpioncapital Posted July 25, 2018 Share Posted July 25, 2018 Ah, I mean disfavoured as in undervalued. I want to see a chart between uptick in data usage and decrease in TV subscribers to streaming services. Also I think that article the comment makes sense..why can't pay TV be like a virtual streaming channel? Choose what channel or even show you want to see on a pay per channel or show basis. Link to comment Share on other sites More sharing options...
chrispy Posted July 25, 2018 Share Posted July 25, 2018 The cord cutting is resulting in ~3% of customers transitioning from a higher revenue, lower margin service (TV) to a lower revenue but higher margin package (broadband only). Does this mean that the 3% attrition is much smaller by the time it hits the earnings? Link to comment Share on other sites More sharing options...
Munger_Disciple Posted July 25, 2018 Share Posted July 25, 2018 Does this mean that the 3% attrition is much smaller by the time it hits the earnings? Earnings will go up if a customer drops linear video and keeps high speed data from Charter. The reason is that stand-alone data only service costs more when it is not bundled with linear video and data service has much higher margin compared to video. There are also less service related costs and CPE costs. You can see this at Cable One for instance which effectively abandoned video and saw its profitability shoot up. Having said that, Charter prefers to sell more services to each customer since the churn goes down when a customer buys multiple services. This is the main reason they are beginning to offer mobile service. Link to comment Share on other sites More sharing options...
BG2008 Posted July 25, 2018 Share Posted July 25, 2018 Does this mean that the 3% attrition is much smaller by the time it hits the earnings? Earnings will go up if a customer drops linear video and keeps high speed data from Charter. The reason is that stand-alone data only service costs more when it is not bundled with linear video and data service has much higher margin compared to video. There are also less service related costs and CPE costs. You can see this at Cable One for instance which effectively abandoned video and saw its profitability shoot up. Having said that, Charter prefers to sell more services to each customer since the churn goes down when a customer buys multiple services. This is the main reason they are beginning to offer mobile service. I think Malone has also mentioned that as a cable company, you don't want to be just a collection of dumb pipes because dumb pipes invite regulation. Link to comment Share on other sites More sharing options...
Liberty Posted July 26, 2018 Share Posted July 26, 2018 Dispute about new builds in NY: https://arstechnica.com/tech-policy/2018/07/ny-threatens-to-kick-charter-out-of-the-state-after-broadband-failures/ Link to comment Share on other sites More sharing options...
walkie518 Posted July 26, 2018 Share Posted July 26, 2018 Dispute about new builds in NY: https://arstechnica.com/tech-policy/2018/07/ny-threatens-to-kick-charter-out-of-the-state-after-broadband-failures/ Even if Spectrum lost its license in NYC, how would that impact its customers? Does internet go down a day? I've heard this story before...Spectrum holds all of the cards here. Should internet go down where there are only a couple providers, in a city of millions, I don't see how the city wins that fight. Link to comment Share on other sites More sharing options...
dwy000 Posted July 26, 2018 Share Posted July 26, 2018 I doubt shut down is one of the options. A lot of fines hoping to force them to clean up their act. Worst case on license is that they make them sell the region to another operator not shut it down. Link to comment Share on other sites More sharing options...
vince Posted July 27, 2018 Share Posted July 27, 2018 Comcast, on the call really highlighted the fact that margins are rising as broadband sales increase and video decreases. In addition, capex intensity is declining. Combined with less cash taxes, fcf is rising very very nicely and it looks like there is continued room for improvement. I assume Charter's ebitda margins will eventually be very comparable and if you apply these percentages to Charter's revenue, you get very nice numbers indeed relative to recent market prices. It is also reasonable that Charters video performance will be better but nice to see that financial performance at Comcast is very good even with video losses. So, in my mind, the last unknown that could derail this is 5g. And even then it probably wouldnt be a complete disaster at these prices but who knows Link to comment Share on other sites More sharing options...
Spekulatius Posted July 27, 2018 Share Posted July 27, 2018 Comcast, on the call really highlighted the fact that margins are rising as broadband sales increase and video decreases. In addition, capex intensity is declining. Combined with less cash taxes, fcf is rising very very nicely and it looks like there is continued room for improvement. I assume Charter's ebitda margins will eventually be very comparable and if you apply these percentages to Charter's revenue, you get very nice numbers indeed relative to recent market prices. It is also reasonable that Charters video performance will be better but nice to see that financial performance at Comcast is very good even with video losses. So, in my mind, the last unknown that could derail this is 5g. And even then it probably wouldnt be a complete disaster at these prices but who knows I felt CMCSA results were very good and highlighting the fact that if the broadband business is healthy, the video subscriber losses don’t matter much. I feel that CMCSA is very undervalued here, given the strength in execution and how well they operate their assets. I do have a significant position in CMCSA stock ( way larger than CHTR) so I am talking my book here. Link to comment Share on other sites More sharing options...
HalfMeasure Posted July 27, 2018 Share Posted July 27, 2018 Comcast, on the call really highlighted the fact that margins are rising as broadband sales increase and video decreases. In addition, capex intensity is declining. Combined with less cash taxes, fcf is rising very very nicely and it looks like there is continued room for improvement. I assume Charter's ebitda margins will eventually be very comparable and if you apply these percentages to Charter's revenue, you get very nice numbers indeed relative to recent market prices. It is also reasonable that Charters video performance will be better but nice to see that financial performance at Comcast is very good even with video losses. So, in my mind, the last unknown that could derail this is 5g. And even then it probably wouldnt be a complete disaster at these prices but who knows I felt CMCSA results were very good and highlighting the fact that if the broadband business is healthy, the video subscriber losses don’t matter much. I feel that CMCSA is very undervalued here, given the strength in execution and how well they operate their assets. I do have a significant position in CMCSA stock ( way larger than CHTR) so I am talking my book here. How do you feel about the price being paid on the Sky offer and the potential for CMCSA to go after another content acquisition after giving up on Fox? Link to comment Share on other sites More sharing options...
vince Posted July 27, 2018 Share Posted July 27, 2018 Dont like the price for sky relative to the returns on buyback. Sky may prove to be a better use of capital way further down the road and Im sure they have strategic thoughts that I am not privy to that may make it a very good investment. It just seems that their stock at 12 times free cash flow growing at 5-8 percent is the safest and surest bet. Then again they are willing to leverage up for acquisitions but not for buybacks and cheap leverage juices their returns. Sky is a great asset, just too expensive. Probably wont find something as good as fox but again the price makes it difficult to see a good return. However, strategically it may give them a better platform to compete and give the business a longer life. From that angle, and with looking back from 10 years out, it may be that overpaying for fox and/or sky was not only advisable, but maybe even critical. I would take the easy route.....borrow 50 billion at 5 % and buy ur own stock at a much better and growing yield. Would love anyone elses thoughts Link to comment Share on other sites More sharing options...
Munger_Disciple Posted July 27, 2018 Share Posted July 27, 2018 I would take the easy route.....borrow 50 billion at 5 % and buy ur own stock at a much better and growing yield. Would love anyone elses thoughts +1 I am surprised Comcast is not more interested in Liberty Global than Sky. Perhaps they like the content assets more than broadband in Europe? Link to comment Share on other sites More sharing options...
Munger_Disciple Posted July 27, 2018 Share Posted July 27, 2018 https://www.cnbc.com/2018/07/27/new-york-votes-to-revoke-approval-of-charters-time-warner-cable-acqui.html?__source=yahoo%7Cfinance%7Cheadline%7Cstory%7C&par=yahoo&yptr=yahoo Link to comment Share on other sites More sharing options...
vince Posted July 27, 2018 Share Posted July 27, 2018 I would take the easy route.....borrow 50 billion at 5 % and buy ur own stock at a much better and growing yield. Would love anyone elses thoughts +1 I am surprised Comcast is not more interested in Liberty Global than Sky. Perhaps they like the content assets more than broadband in Europe? Yes it looks like they want content assets, worldwide. They have done a great job with NBC and gives them some nice diversification. They also mentioned on the call that they want to be in a position to do well regardless of where these businesses shift rather than betting too much on one thing. Link to comment Share on other sites More sharing options...
vince Posted July 27, 2018 Share Posted July 27, 2018 One thing is certain....the prices these assets are being acquired (pmv) are way higher than stock quotes. Even Lbtya sale of German unit at 11-12 times is crazy compared to market prices. Either these prices are going to turn out to be very expensive or I'm gonna make alot of money. Link to comment Share on other sites More sharing options...
Munger_Disciple Posted July 27, 2018 Share Posted July 27, 2018 Craig Moffett on Comcast: https://www.investopedia.com/news/comcast-should-buy-charter-moffettnathanson/?partner=YahooSA&yptr=yahoo “Comcast’s bid for Sky at 14x Ebitda is impossible to justify versus the always-available alternative of buying back stock at what is now less than 7x EBITDA…a multiple that to us looks too low.” Link to comment Share on other sites More sharing options...
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