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 Insider Alert - $6 Stock To Hit $40

$200 Million Dollar Healthcare Hedge Fund's #1 Best Idea Right Now

The best healthcare hedge fund out there right now is one of the largest shareholders in this biotech stock. The fund returned more than 20% in each of the last 2 years with a virtually fully hedged portfolio, and it's sending out a BUY signal on this biotech stock. Get your FREE REPORT today (retail value of $300)

This is a FREE report from Insider Monkey. Credit Card is NOT required.
Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

The Most Wanted Drug Lords

The Oldest Money Managers

The Greatest Directors in the World

Largest Animals in the World

World’s Most Expensive Desserts

Best Selling Comic Books of All Time

A-list Actors who Sabotaged Their Career

Rappers With a College Degree

The Best Jazz Albums of all Time

The Most Influential Jazz Musicians

The World’s Most Famous Photographers

The Best Oscar-Winning Songs

Most Influential Choreographers Ever

Most Expensive Department Stores in the World

The Most Expensive Stolen Paintings in the World

The World’s Most Expensive Teas

Top Oscar Record Holders

The Most Expensive Flowers in the World

Countries With a Booming Film Industry

Most Expensive Cupcakes in the World

Uncommon European Escapes

The Most Stolen Artists in History

Best Travel Destinations in Australia

World’s Most Expensive Musical Instruments

World’s Most Famous Animals

Most Expensive Cakes in the World

Most Expensive Kosher Champagne in the World

Most Expensive Kosher Wine in the World

The Most Surprisingly Dark Fairy Tales

Most Popular Travel Destinations in Asia

The 10 Most Expensive Dresses Ever Worn to the Oscars

World’s Most Visited Art Museums

Best Countries for Photographers to Work in

Best Paid Jobs in the Film Industry

The Most Renowned Recovered Paintings Ever

Child Stars That Turned out Just Fine

Books That Were Banned in the Past Century

World’s Richest Dancers

Best Remedies against Bad Breath

Foods That Improve Your Skin Texture

Best-Selling Children’s Books of all Time

Foods That Boost Your Libido

Best-Selling Books of all Time

The Most Expensive Academy Awards Jewelry in History

Most Expensive Japanese Restaurant In New York City

The Best B-Boy Movies

Most Awesome Hip Hop Documentaries

Foods That Stain Your Teeth

Richest Doctors in the World

The Best Movie Sountracks Ever

Subscribe

Enter your email:

Delivered by FeedBurner

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 129% in 2.5 years!! Wondering How?

Download a complete edition of our newsletter for free!