Cable and CHTR

[Scorpion Man]

http://blogs.barrons.com/techtraderdaily...od=yahoobarrons

[ski]

anyone who knows what their doing care to comment on this?

[CrushinFelt]

Paging DC.

[PRE]

Scorpion, got it on CHTR a couple weeks ago after I PMed you. Thanks again

[cecil]

[ QUOTE ]
anyone who knows what their doing care to comment on this?

[/ QUOTE ]
based on cablevisions projections we can assume CHTR will have around 350 mil in free cash flow by 2010. at 10x 2010 projected free cash flow CHTR would be worth $8.50 per share today on a net present value basis. at 15x, $12.75.

cablevisions projections look really optimistic. reducing capex for five consecutive years in this industry is impressive. "due to a decline over the plan period of digital subscriber additions as a result of Cablevision’s maturing digital penetration." -- i do not understand that, will CHTR be able to do this?

im too lazy to look since i do not have any interest in thse companies, but how similar are CVC and CHTR?

you have anything to add sm?

[cecil]

given a 6% (modest when compared to CVCs projections) increase in ebitda for CHTR at a 11x multiple puts them at right around $8.50 a share as well.

i took ebitda, debt and shares from yahoo so they might be off.

((1960*1.06*11)-19340)/408=$8.61

[Scorpion Man]

[ QUOTE ]
given a 6% (modest when compared to CVCs projections) increase in ebitda for CHTR at a 11x multiple puts them at right around $8.50 a share as well.

i took ebitda, debt and shares from yahoo so they might be off.

((1960*1.06*11)-19340)/408=$8.61

[/ QUOTE ]

Basic thesis is that people are underestimating the ebitda growth - this can be close to 15% for many years as they rollout VOIP and start marketing more aggressively in general again. Worst thing that could happen for charter is interest rates spiking.

Best news is that this stock is barely on people's radar screen despite the fact that it is a substantial company ($22Bish ent value). Otherwise, the leverage works for us here as things are getting better and this will start to hit people's radar screens. I own CMCSK as well, but CHTR will scream if that article I posted is right.

[cecil]

i worked backwards to get the 6%. wanted to see what growth was needed to hit 8.50 area. obviously with 15% the stock is big bargain.

[KUJustin]

Isn't Verizon taking a huge share in the markets it's entered?