vince Posted February 12, 2020 Share Posted February 12, 2020 Charter share repurchases are very strong again according to their February filing, and at MUCH higher prices than the average of the last few years. I repeat that I believe this is a strong indicator that the business is now coasting on a high single-low double digit Ebitda earning power growth rate. I believe Cable EBITDA can certainly grow at a high single - low double digit rate. I have 2020E growing at approx ~9.5%. The co's adj. EBITDA figures are being weighted down by mobile (current net loss), which will continue to consume margins at about 120-160bps. That being said, there is also the possibility of management overstating CapEx reduction and understating mobile's eventual break-even point which will impact FCF growth. Its interesting that we automatically assume that mgmt may be understating capex however when you listen to Rutledge he claims that higher capex is better because they get good returns on it. And for mobile breakeven you can just look at Comcast's results. They originally claimed 2 million subscribers is enough scale to breakeven but it's more like 2.5 million. They will reach that this year and recently claimed positive Ebitda for 2020 mobile Link to comment Share on other sites More sharing options...
Liberty Posted February 12, 2020 Share Posted February 12, 2020 Its interesting that we automatically assume that mgmt may be understating capex however when you listen to Rutledge he claims that higher capex is better because they get good returns on it. And for mobile breakeven you can just look at Comcast's results. They originally claimed 2 million subscribers is enough scale to breakeven but it's more like 2.5 million. They will reach that this year and recently claimed positive Ebitda for 2020 mobile Capex is more than one thing. More capex on new build probably gets good returns. But when capex on the TWC acquisition integration falls, that's good, and you don't want that to drag on for longer than it has to, or have higher costs, because the return on that probably doesn't go up with spend. Link to comment Share on other sites More sharing options...
wabuffo Posted February 12, 2020 Share Posted February 12, 2020 Capex is more than one thing. The biggest component of capex is customer-premise equipment (ie. video boxes). That is definitely falling with plummeting video subscribers (plus recycling returned video boxes). I did a rough-and-dirty analysis of all of the public cablecos and cash flows will be expanding as video subscribers fall. The growth of Disney+, Hulu, Netflix, HBO+, etc is very good for the cablecos as it continues to make high-speed broadband internet a huge cash flow generator as subscribers drop video and increases broadband speed and usage. Broadband prices are rising and will continue to rise. Charter took internet pricing in Q4 (after holding the line for a few years) that is just flowing through in 2020. wabuffo Link to comment Share on other sites More sharing options...
vince Posted February 13, 2020 Share Posted February 13, 2020 Its interesting that we automatically assume that mgmt may be understating capex however when you listen to Rutledge he claims that higher capex is better because they get good returns on it. And for mobile breakeven you can just look at Comcast's results. They originally claimed 2 million subscribers is enough scale to breakeven but it's more like 2.5 million. They will reach that this year and recently claimed positive Ebitda for 2020 mobile Capex is more than one thing. More capex on new build probably gets good returns. But when capex on the TWC acquisition integration falls, that's good, and you don't want that to drag on for longer than it has to, or have higher costs, because the return on that probably doesn't go up with spend. Agreed Link to comment Share on other sites More sharing options...
CookingByTheNumbers Posted February 13, 2020 Share Posted February 13, 2020 Charter share repurchases are very strong again according to their February filing, and at MUCH higher prices than the average of the last few years. I repeat that I believe this is a strong indicator that the business is now coasting on a high single-low double digit Ebitda earning power growth rate. I believe Cable EBITDA can certainly grow at a high single - low double digit rate. I have 2020E growing at approx ~9.5%. The co's adj. EBITDA figures are being weighted down by mobile (current net loss), which will continue to consume margins at about 120-160bps. That being said, there is also the possibility of management overstating CapEx reduction and understating mobile's eventual break-even point which will impact FCF growth. Its interesting that we automatically assume that mgmt may be understating capex however when you listen to Rutledge he claims that higher capex is better because they get good returns on it. And for mobile breakeven you can just look at Comcast's results. They originally claimed 2 million subscribers is enough scale to breakeven but it's more like 2.5 million. They will reach that this year and recently claimed positive Ebitda for 2020 mobile Fair enough. Now that I think about it, Rutledge did mention $10 per home passed for DOCSIS 3.1 and an upgrade to 10 gig symmetrical (DOCSIS 4.0 full duplex) per home at a relatively low incremental cost. Anyone have any insight into what kind of margin profile/economics mobile can eventually achieve? From my understanding, physical phones account for a majority of mobile expense. And at what point does mobile become a core segment of revenue? Link to comment Share on other sites More sharing options...
vince Posted February 13, 2020 Share Posted February 13, 2020 Charter share repurchases are very strong again according to their February filing, and at MUCH higher prices than the average of the last few years. I repeat that I believe this is a strong indicator that the business is now coasting on a high single-low double digit Ebitda earning power growth rate. I believe Cable EBITDA can certainly grow at a high single - low double digit rate. I have 2020E growing at approx ~9.5%. The co's adj. EBITDA figures are being weighted down by mobile (current net loss), which will continue to consume margins at about 120-160bps. That being said, there is also the possibility of management overstating CapEx reduction and understating mobile's eventual break-even point which will impact FCF growth. Its interesting that we automatically assume that mgmt may be understating capex however when you listen to Rutledge he claims that higher capex is better because they get good returns on it. And for mobile breakeven you can just look at Comcast's results. They originally claimed 2 million subscribers is enough scale to breakeven but it's more like 2.5 million. They will reach that this year and recently claimed positive Ebitda for 2020 mobile Fair enough. Now that I think about it, Rutledge did mention $10 per home passed for DOCSIS 3.1 and an upgrade to 10 gig symmetrical (DOCSIS 4.0 full duplex) per home at a relatively low incremental cost. Anyone have any insight into what kind of margin profile/economics mobile can eventually achieve? From my understanding, physical phones account for a majority of mobile expense. And at what point does mobile become a core segment of revenue? Neither Comcast nor Charter have given any info on margin profile except to say that once scale is reached mobile would be profitable on a stand alone basis. Additionally, there is strong evidence that bundling mobile with other services reduces churn and that is the main benefit they are seeking....at least while they are still an MVNO. Link to comment Share on other sites More sharing options...
WayWardCloud Posted March 3, 2020 Share Posted March 3, 2020 Charter at Morgan Stanley Technology, Media & Telecom Conference https://ir.charter.com/ Can anyone explain Dual SIM technology to me? Do many phones have two SIM card slots now? Winfrey talks about it as a possible future solution to switch between the Verizon MVNO and their own network for those high traffic areas where it makes sense to build their own towers. I've been a client of Google Fi for 3 years now and there's simply no SIM at all. Google switches between my WiFi, the Sprint network and the T-Mobile network seamlessly (ha!) without ever dropping signal even if I move during the call so I thought this technology was mastered already. Link to comment Share on other sites More sharing options...
dwy000 Posted March 4, 2020 Share Posted March 4, 2020 I'm no expert but as I understand it is basically the ability to have 2 SIM's in the same phone. So you can have your work number on Verizon and your home phone on T-Mobile on the same phone. The SIM's are switching from cards to SIM's which means it is just software in the phone and not something you physically pull out (although in dual SIM one can be card and one eSIM). It separates the phone from the network and allows very, very simple switching between networks. Link to comment Share on other sites More sharing options...
HalfMeasure Posted March 4, 2020 Share Posted March 4, 2020 I'm no expert but as I understand it is basically the ability to have 2 SIM's in the same phone. So you can have your work number on Verizon and your home phone on T-Mobile on the same phone. The SIM's are switching from cards to SIM's which means it is just software in the phone and not something you physically pull out (although in dual SIM one can be card and one eSIM). It separates the phone from the network and allows very, very simple switching between networks. When travelling, you could also have your home country SIM in your phone (e.g. from VZ/TMUS/T) while simultaneously putting a local SIM in the phone in order to avoid roaming charges - use the local SIM when it makes sense, but still have your home SIM in. This avoids having to completely swap out SIMs which could be disruptive, e.g. if you miss a particularly important call on your home number while out of the country. Link to comment Share on other sites More sharing options...
Munger_Disciple Posted March 10, 2020 Share Posted March 10, 2020 http://archive.fast-edgar.com//20200310/ABZ2Q622Z22S2ZXZ2E2L2ZZ2TLAW6Z2SZ222/ Charter bought back shares @$525 per share from AdvanceNewhouse on 3/9/20. How can this be? Charter was trading far below this price yesterday. Link to comment Share on other sites More sharing options...
Guest eatliftinvestgolf Posted March 10, 2020 Share Posted March 10, 2020 It seems like a typo based on reading the letter. https://www.sec.gov/Archives/edgar/data/1091667/000119312516805546/0001193125-16-805546-index.htm Link to comment Share on other sites More sharing options...
Liberty Posted March 10, 2020 Share Posted March 10, 2020 It seems like a typo based on reading the letter. https://www.sec.gov/Archives/edgar/data/1091667/000119312516805546/0001193125-16-805546-index.htm What you linked is from 2016..? Link to comment Share on other sites More sharing options...
Guest eatliftinvestgolf Posted March 10, 2020 Share Posted March 10, 2020 It seems like a typo based on reading the letter. https://www.sec.gov/Archives/edgar/data/1091667/000119312516805546/0001193125-16-805546-index.htm What you linked is from 2016..? This document is what was referenced in the footnote as determining the purchase price. Link to comment Share on other sites More sharing options...
chrispy Posted March 13, 2020 Share Posted March 13, 2020 I am a little too optimistic on the negligible impact the current situation could have on CHTR. Any thoughts on what could alter charters cash flow or how they use it? Could this be a catalyst for residential customers to increase to faster speeds? Link to comment Share on other sites More sharing options...
dwy000 Posted March 13, 2020 Share Posted March 13, 2020 I am a little too optimistic on the negligible impact the current situation could have on CHTR. Any thoughts on what could alter charters cash flow or how they use it? Could this be a catalyst for residential customers to increase to faster speeds? Completely agree. If you (and your kids) are stuck at home for a couple of weeks the likelihood is watching more TV and using more internet. In fact, if you were thinking of cutting the cord, you might now wait or reconsider given you're stuck at home. I see this as a net benefit not a negative one. In fact, AT&T removed it's data caps on home internet this week for a while to support stay at home customers. Comcast and Charter didn't. Link to comment Share on other sites More sharing options...
chrispy Posted March 13, 2020 Share Posted March 13, 2020 Yes, no one is cutting the cord right now unless they are having a financial hardship Link to comment Share on other sites More sharing options...
Kaegi2011 Posted March 13, 2020 Share Posted March 13, 2020 Yes, no one is cutting the cord right now unless they are having a financial hardship Agreed that impact is minimal financially, but as asset prices come down I think the risk is on the multiple side. Not a judgment on current valuation, but at the end of the day it's all relative. Link to comment Share on other sites More sharing options...
Liberty Posted April 6, 2020 Share Posted April 6, 2020 https://corporate.charter.com/newsroom/charter-statement-regarding-plans-to-permanently-raise-minimum-wage-to-20-dollars-per-hour-over-next-two-years Link to comment Share on other sites More sharing options...
BG2008 Posted April 6, 2020 Share Posted April 6, 2020 https://corporate.charter.com/newsroom/charter-statement-regarding-plans-to-permanently-raise-minimum-wage-to-20-dollars-per-hour-over-next-two-years Interesting development (likely bullish) and a good way to earn some goodwill with this wage increase. Or the flip side is that it is very difficult to retain employees and they are forced to do this. Link to comment Share on other sites More sharing options...
vince Posted April 9, 2020 Share Posted April 9, 2020 https://corporate.charter.com/newsroom/charter-statement-regarding-plans-to-permanently-raise-minimum-wage-to-20-dollars-per-hour-over-next-two-years Link to comment Share on other sites More sharing options...
Grenville Posted April 21, 2020 Share Posted April 21, 2020 What kind of leadership is this....Give the man his job back and then if you're gonna require them to show up at the office then make sure you're sitting next to them if it's so important and can't be done remotely. https://www.cnbc.com/2020/04/21/new-york-ag-opens-inquiry-into-charters-coronavirus-response.html what am i missing here...this just doesn't make any sense... Link to comment Share on other sites More sharing options...
NotSoWise Posted April 21, 2020 Share Posted April 21, 2020 Its called "leadership by stock options". His KPIs do not include "coronavirus survivorship" or "% of employees without ventilator". Link to comment Share on other sites More sharing options...
Liberty Posted May 1, 2020 Share Posted May 1, 2020 Q1: https://ir.charter.com/static-files/34377ce6-5cd4-40c1-bb41-1de0889a706d Cable FCF up 70.9% YoY! Link to comment Share on other sites More sharing options...
scorpioncapital Posted June 16, 2020 Share Posted June 16, 2020 Is SpaceX , musk a deadly risky to charter shareholders? https://www.fool.com/investing/2020/06/15/spacex-inches-closer-to-a-16-billion-fcc-payday.aspx "With its Starlink satellites orbiting so much closer to Earth, though, SpaceX is promising latency "below 20 milliseconds," on par with latency from a wired internet provider on Earth. The FCC initially doubted this assertion, but last week the FCC confirmed it will give SpaceX a chance to prove its capability." Link to comment Share on other sites More sharing options...
WayWardCloud Posted June 16, 2020 Share Posted June 16, 2020 Disclaimer : I have not yet studied the satellite option from a technical aspect so the following are merely hunches and self questioning. A couple of years ago, all the rage was about how residential 5G was going to take market share from cable. We were all studying its limitations: only a few blocks radius, problems with moving vehicles, weather, trees and going deep into buildings. Then nothing happened. Turns out either Verizon was bluffing or they were way too early/optimistic on the technology. How is something orbiting 340 miles away with its signal going through weather, migrating birds, planes, roofs and storeys, going to succeed at delivering an experience even close to home broadband if 5G can't? Musk has a history of vastly over promising as far as timelines are concerned but he usually does end up delivering eventually, so I wouldn't completely brush the danger off for the longer run. In fact, I believe it's almost unavoidable that several companies will blanket the Earth with some form of primitive internet access available en masse sometimes in the next 4-7 years, because places like Africa are simply too big of a new addressable and growing market for the Facebook, Google and Tencent of the world. However, while the satellite technology is being deployed, our data consumption will keep increasing as will terrestrial broadband's capacity (10 and 25 GBPS symmetrical are in the pipes). For all those reasons I just don't see why satellite broadband would replace the extremely high quality broadband access that's already in place in people's homes and offices all over the developed world. I have to admit though that it does make me rethink my investments in Millicom and Liberty Latin America a bit. Link to comment Share on other sites More sharing options...
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