We recently compiled a list of the Top 10 Stocks to Buy According to Eagle Capital Management. In this article, we are going to take a look at where Comcast Corporation (NASDAQ:CMCSA) stands against the other stocks.
Eagle Capital Management, a New York-based hedge fund, was founded in 1988 by Beth and Ravenel Curry. Their son, Ravenel Boykin Curry IV, joined the firm around the early 2000s after managing a portfolio at Kingdon Capital and is currently a key partner. A Yale University graduate with an Economics degree and an MBA from Harvard Business School, he plays a pivotal role in the firm’s strategy. Historically, Eagle has outperformed major benchmarks, including the broader market and the Russell Value Index. Over five years, Eagle delivered a 5.7% return versus the market’s 2.4%, and since its inception, it has generated a cumulative return of 2,031%, significantly surpassing both indices.
Eagle Capital Management adheres to a disciplined investment philosophy centered on identifying undervalued companies with unrecognized long-term growth potential. The firm employs a fundamental, bottom-up research approach, focusing on the key drivers of long-term value creation. By maintaining an extended investment horizon, Eagle Capital is able to take a distinctive perspective on industry and company trends. The firm’s investment strategy prioritizes businesses with two essential characteristics: strong underlying assets capable of generating cash flow and sustaining value even in challenging market conditions, and transformative changes within the company that remain unrecognized by the broader market yet are likely to drive future growth. This approach aims to provide downside protection during market downturns while positioning the portfolio for enhanced returns as these changes materialize. These core principles have been integral to Eagle Capital’s strategy since its founding, forming the foundation of its competitive advantage and contributing to its consistent market outperformance since 1988.
Moreover, Eagle Capital Management follows a value-oriented investment strategy with a long-term perspective, assessing price in relation to intrinsic value rather than relying solely on traditional valuation metrics like price-to-earnings or price-to-book ratios. The firm’s investment team focuses on long-term prospects, particularly beyond five years, analyzing business growth, industry dynamics, and margin potential while identifying opportunities that the broader market may overlook. A key component of Eagle’s strategy is maintaining a “Margin of Safety,” achieved through valuation discounts, business resilience, growth potential, and strong, experienced leadership.
The firm concentrates its portfolio on high-conviction investments, typically holding 25-35 stocks. As of Q4 2024, it holds over $27.4 billion in 13F securities, and its top ten positions account for 57.62% of its portfolio. This approach allows Eagle to focus on asymmetric risk opportunities, ensuring that its top positions offer significant upside potential while maintaining strong downside protection. Adopting a private equity-style approach to public equity investing, Eagle builds positions in high-quality businesses with sustainable returns and durability. A rigorous due diligence process precedes any investment decision, and the firm leverages direct access to senior management at portfolio companies to gain deeper insights into long-term strategies, enabling decisive action when the right opportunities emerge. Since its inception, Eagle has consistently applied the same investment philosophy, aiming to generate superior returns through rigorous valuation analysis and a long-term perspective. The firm’s long-term investment horizon allows it to take a differentiated approach to market trends, focusing on businesses undervalued relative to their intrinsic earnings power.
Our Methodology
The stocks discussed below were picked from Eagle Capital Management’s Q4 2024 13F filings. They are compiled in the ascending order of the hedge fund’s stake in them as of December 31, 2024. To assist readers with more context, we have included the hedge fund sentiment regarding each stock using data from 1,008 hedge funds tracked by Insider Monkey in the fourth quarter of 2024.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A couple watching their favorite show on TV, enjoying the entertainment network service.
Comcast Corporation (NASDAQ:CMCSA)
Number of Hedge Fund Holders as of Q4: 80
Eagle Capital Management’s Equity Stake: $1.16 Billion
Comcast Corporation (NASDAQ:CMCSA) delivered strong financial results for the fourth quarter, surpassing Wall Street expectations despite challenges in its broadband and streaming segments. The company reported revenue of $31.92 billion, exceeding analysts’ projections of $31.64 billion, while earnings per share reached $0.96, outperforming the expected $0.86. Net income surged 47% year-over-year to $4.78 billion, reflecting robust earnings growth. While these positive financials bolstered Comcast’s overall performance, investor sentiment remained mixed due to continued subscriber losses in key business areas.
Broadband remains a significant revenue driver for Comcast Corporation (NASDAQ:CMCSA) despite the ongoing industry slowdown in customer growth. The company lost 139,000 residential broadband subscribers in the quarter, exceeding the 100,000 losses forecasted by Comcast Cable CEO Dave Watson in December. The company’s executives acknowledged that these figures were disappointing, citing intensified competition from wireless providers as a primary challenge. To offset broadband losses, Comcast plans to shift its strategic focus toward expanding its Xfinity Mobile business, which has surpassed 7.8 million mobile lines. By bundling mobile services with broadband, the company aims to strengthen customer retention and drive growth in its Connectivity and Platforms segment.
Peacock, Comcast Corporation (NASDAQ:CMCSA)’s streaming service, reported 36 million paid subscribers in the fourth quarter, marking an increase from the previous year but remaining flat compared to the prior quarter. Wall Street had anticipated a higher total of 37.56 million, contributing to concerns about stagnant subscriber growth. However, Peacock’s revenue rose to $1.3 billion, an improvement from $1 billion in the same period last year, which indicates that Peacock is progressing toward profitability, driven by increased ad revenue and subscriber retention. Despite this momentum, overall advertising revenue across Comcast’s media segment remained flat, as higher ad sales for Peacock were offset by declines in traditional TV network advertising. Consequently, the stock dropped 11% following the earnings report, reflecting lingering concerns about broadband losses and slower-than-expected streaming subscriber growth.
ClearBridge Growth Strategy stated the following regarding Comcast Corporation (NASDAQ:CMCSA) in its Q4 2024 investor letter:
“We continue to consolidate our positions within media to those with more attractive growth prospects over the next several years. We sold media conglomerate Comcast Corporation (NASDAQ:CMCSA) as it faces greater competition and weakening pricing in its core broadband business. The growth outlook for Comcast is more challenged as competition from new entrants and dampened pricing power has impacted its connectivity business. Industry-wide saturation in broadband, coupled with a secular decline in cable TV subscribers, has diminished growth potential in its core cable business. Comcast’s ability to offset these subscriber losses through price increases is also becoming increasingly constrained.”
Overall CMCSA ranks 9th on our list of the stocks to buy according to Eagle Capital Management. While we acknowledge the potential of CMCSA as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than CMCSA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.