Telecom company good for investors who like a gamble

Executive Broadcasts

Latest Broadcasts

Stockhouse Inc.

STKH

Internet/Technology

URANIUM NORTH RESOURCES CORP

V.UNR

BASIC MATERIALS - METALS & MINING

Petro Vista Energy Corp

V.PTV

BASIC MATERIALS - ENERGY

TapImmune Inc.

TPIM

Healthcare

Mexivada Mining Corp.

V.MNV

Natural Resources

Timmins Gold Corp

V.TMM

Basic Materials - Metals & Mining

Visit the Executive Broadcast Center

INVESTOR MARKETPLACE

An excellent place to start your search for new investments!

add to favorites

print email

Telecom company good for investors who like a gamble

5/13/2008 3:35:28 PM | From the news desk of 24/7 Wall St.

413 Reads | 3 Comments

Rate this

clarity
4

clarity : 4
Rate this:

overall quality
3 overall quality : 3
Average quality rating by the Stockhouse community.

credibility
4

credibility : 4
Rate this:

usefulness
3

usefulness : 3
Rate this:

Charter Communications needs more to compete with phone companies’ products.

Charter Communications (NASDAQ: CHTR, Bullboard) is the most risky telecom or cable investment of any of the stocks traded on a major U.S. exchange. The company is controlled by billionaire Paul Allen, co-founder of Microsoft (NASDAQ: MSFT, Bullboard).

Normally, a cable company trading at an extremely low price-to-sales ratio would be an attractive stock. Other firms in the industry, particularly Comcast (NASDAQ: CMCSA, Bullboard) and Time Warner Cable (NYSE: TWC, Bullboard), are doing well. They have been converting analog customers to digital, which allows for more paid TV channels. They have also been adding VoIP and broadband users. Almost all of their consumer voice business is being taken for phone companies and is highly profitable.

Charter suffers from two nearly fatal problems – low operating income and extraordinarily high debt. In the first quarter of the year, CHTR revenue was up about 10% to $1.564 billion. This was helped by sign-ups of voice and broadband subscribers. Operating income was $205 million. But the company has $465 million in debt service on its $20.6 billion in debt. Charter has almost no cash.

Charter needs more money to compete with TV and fiber broadband products coming on line from phone companies. It cannot put the cash into new products because it has no way to get the money for capital expenditures.

Charter's most likely future is in Chapter 11 or a financing from Allen that would push the value of common shares down to a few pennies. The stock trades at $1.18, down from a 52-week high of $4.93. Good shares for people who like to gamble.

ABOUT THE AUTHOR

From the news desk of 24/7 Wall St.

This report was prepared by 24/7 Wall St., LLC exclusively for Stockhouse.

Stockhouse Conflict and Disclosure Policy:

Stockgroup Media Inc., owners and operators of Stockhouse.ca/com, has established rules to ensure that there is no appearance of impropriety on the part of any Stockhouse writers who discuss or name individual public companies in the content published on the Stockhouse websites. The content of Stockhouse Editorial articles are the opinion of the writer and any reliance on the content of these articles shall be at your sole risk.

Stockhouse Editorial writers may own, buy, or sell shares in public companies mentioned in their articles. Please be advised that a conflict may exist and that any investment decisions you make are your own responsibility. Additionally, our Editorial writers are not registered investment advisors. You should not make any kind of investment decision in relation to these articles or stocks discussed in them without first obtaining independent investment advice from a registered investment advisor.

Facts relied upon by our Editorial writers in arriving at their opinions are generally provided by the subject companies or gathered by our Editorial writers from other public and/or private sources. These facts may be in error and if so, the opinions of our Editorial writers may be materially different.

Rules applying to Stockhouse Editorial Writers

Stockhouse Editorial writers may own stock of any company they cover, but at the bottom of the article or within the article they must clearly and prominently state their ownership position in the company.

Stockhouse Editorial writers cannot solicit, accept, or agree to receive anything of value given or paid with the intent of influencing their editorial articles published on Stockhouse.

Stockhouse Editorial writers are not permitted to write articles that attempt to influence or benefit persons connected to the writer such as family or friends, , except where disclosure is made in the same way as if the writer him/herself owns stock.

Stockhouse notifies each Editorial writer about these rules but in case of a possible breach of our rules, we may not be in a position to find out or investigate the facts. We rely on the integrity of our writers to ensure that our rules are followed.

FREE REPORTS