Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

The Company You Hate Could be a Great Investment: Netflix, Inc. (NFLX), Comcast Corporation (CMCSA), CBS Corporation (CBS)

Page 1 of 2

Investors need to be able to separate what they hear in the news media, from what is actually going on at the company itself. How many headlines have cried that customers are canceling their cable subscriptions in favor of services like Netflix, Inc. (NASDAQ:NFLX), Amazon.com, Inc. (NASDAQ:AMZN) Prime, Hulu, and more?

Here’s the problem with these dire predictions, cable companies are not only surviving, they are actually doing pretty well. A prime example of a company with a proverbial target on its back is Comcast Corporation (NASDAQ:CMCSA).

Netflix, Inc. (NASDAQ:NFLX)

Cutting The Cord Isn’t As Easy As It Seems
Since a large portion of Comcast Corporation (NASDAQ:CMCSA)’s business is tied to cable services, it only makes sense to determine if this “cutting the cord” phenomenon is a real problem. When it comes to cutting out primary television channels, you could make the argument that a digital antenna would do the trick. This may give the customer access to Comcast Corporation (NASDAQ:CMCSA)’s NBC channel, CBS Corporation (NYSE:CBS), and The Walt Disney Company (NYSE: DIS)’s ABC lineup. However, if customers want sports coverage from ESPN they are out of luck. If they want premium channels like Time Warner Inc’s (NYSE:TWX) HBO, or CBS’ Showtime network they won’t have that option either.

I know that some would say they can get a lot of shows on services like Netflix, Inc. (NASDAQ:NFLX), Amazon Prime, and Hulu. However, each of these services all have one thing in common, you need a good high-speed Internet connection. For this connection, there are basically two choices, cable Internet or the telephone company’s DSL or FiOS offerings. Since cable and telephone companies know they are the two big fish in an otherwise empty pond, pricing isn’t significantly different at the same connection speeds.

Where does this leave the cable company? Honestly,it means that many people who try to cut the cord end up having high-speed Internet from the cable company anyway. Since most cable companies charge a higher price for high-speed Internet if you have no video service, in many cases this idea just doesn’t make sense.

A Unique Competitive Advantage
In the recently announced deal between Comcast Corporation (NASDAQ:CMCSA) and General Electric Company (NYSE: GE), Comcast will acquire the 49% of NBCUniversal it didn’t already own. Comcast Corporation (NASDAQ:CMCSA) said they mainly sped up the purchase of this asset due to bullishness around the prospects of NBCUniversal. The company backed this up by also raising their dividend 20%, and announcing a $2 billion share repurchase plan.Comcast will have a distinct advantage of owning the “pipes” and the content.

Comcast Corporation (NASDAQ:CMCSA)’s nearest competitor Time Warner can’t claim this since they split the Time Warner Cable Inc (NYSE: TWC) company into a separate entity. While CBS has excellent content, and Walt Disney has iconic brands, neither of these companies own their own distribution either.

Page 1 of 2

Biotech Stock Alert - 20% Guaranteed Return in One Year

Hedge Funds and Insiders Are Piling Into

One of 2015's best hedge funds and two insiders snapped up shares of this medical device stock recently. We believe its transformative and disruptive device will storm the $3+ billion market and help it achieve 500%-1000% gains in 3 years.

Get your FREE REPORT and the details of our 20% return guarantee today.

Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.
Loading Comments...
X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 102% in 3 years!! Wondering How?

Download a complete edition of our newsletter for free!