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Charter Communications, Inc. (CHTR), Time Warner Cable Inc (TWC): Making Money From John Malone’s Lunch

That’s why investors have been piling into Charter Communications, Inc. (NASDAQ:CHTR) all year, raising its value 62% so far. The company’s finances are nothing to write home about.Revenue has stagnated at $1.9 billion per quarter, there hasn’t been a bottom line in years, and even operating income has been falling. Debt to assets sits north of 75%, and even cash flow is cratering. The only reason to be in Charter Communications, Inc. (NASDAQ:CHTR) is to get out of Charter Communications, Inc. (NASDAQ:CHTR), in other words. Malone’s investment started its bull run, and the hope of a cash-out – either from Liberty or perhaps Time Warner Cable Inc (NYSE:TWC) – is keeping it going.

Time Warner Cable Inc (NYSE:TWC), meanwhile, has become a good value play. Its $0.65 per share dividend yields 2.34%. It usually makes money, its debt-to-asset ratio is two-thirds’ that of Charter Communications, Inc. (NASDAQ:CHTR), and it has been throwing out an average of $3 billion in cash each quarter, making that dividend very easy to sustain.

The Foolish Bottom Line

All this means you have two easy ways to play Malone’s ambitions, either one of which would likely yield you a good hunk of stock and cash within a fairly short time period. Charter is the weaker gazelle, but you can put money into Time Warner Cable Inc (NYSE:TWC) and wait out the hunt.

Dana Blankenhorn has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Dana is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

The article Making Money From John Malone’s Lunch originally appeared on is written by Dana Blankenhorn.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

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