Charter Communications, Inc.
), a leading American cable multi service operator (MSO), zoomed to
a new life time high of $150.67 on Friday before closing the
session a little lower at $150.51. Over the past twelve months, the
company's shares have gained more than 27%.
The company's shares have jumped nearly 20% in the past two
months on the back of subscriber growth. As of Mar 31, 2014,
Charter Communications had 4.195 million video, 4.519 million
Internet and 2.325 million voice customers. During first-quarter
2014, the company gained 18,000 video customers, 136,000 Internet
and 52,000 voice customers. Average revenue per customer
relationship was $110.29 compared with $107.33 in the prior-year
In Apr 2014, Charter Communications and
) reached a strategic cable TV agreement following the latter's
Time Warner Cable Inc.
). The merged entity of Comcast and Time Warner Cable will have
around 33 million pay-TV subscribers. In order to avoid antitrust
restriction, Comcast has decided to divest around 3.9 million Time
Warner Cable video subscribers to Charter Communications to
maintain its total share at 30% of the U.S. market.
Following the subscriber takeover, Charter Communication will
become the second largest pay-TV operator in the U.S. with around
5.7 million subscribers. We believe this deal will benefit Charter
Communications significantly as the company will achieve necessary
scale to counter competition in the intensely competitive U.S.
pay-TV market. Charter Communications' agreement with Comcast is a
major reason why investors have been pumping money into the company
over the past two months.
Charter Communication currently has a Zacks Rank #3 (Hold). A
stock worth considering in this sector is
), which sports a Zacks Rank #1 (Strong Buy).
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