Warren Buffett has a knack for identifying winners before other players in the market and this time Charter Communications, Inc. (NASDAQ:CHTR) has been given the blessings by the Oracle of Omaha as he takes a substantial position in the company. Jack Mohr of TheStreet reported the news.
This year has seen the cable companies battle for market dominance as Charter Communications, Inc. (NASDAQ:CHTR) and Comcast Corporation (NASDAQ:CMCSA) waged war in acquiring Time Warner Inc (NYSE:TWX). Charter which is the fourth largest cable operator in the country lost as Time Warner decided to go with Comcast.
So what exactly did Buffet see in this loser that made him place a significant bet on the company’s future earnings. This is something that comes with years of investing experience, an ability to go against the market and be right more than 90% of the time. Mohr reflected some light on the secret sauce that Buffet is hoping to pour over his Holding Company, Berkshire Hathaway Inc. (NYSE:BRK.A), with this investment.
” […] In order to satisfy antitrust regulators and Comcast Corporation (NASDAQ:CMCSA) is getting rid of nearly 1.5 million Time Warner subscribers and guess who is picking those subscribers up? Charter Communications, Inc. (NASDAQ:CHTR) itself. The subscriber swap nearly doubles its video customers, solidifies its footprint, and once complete makes Charter the number two cable company in America. That is a game changer […],” said Mohr.
The last successful acquisition that the cable company was involved in was back in July 2013, when it acquired Cablevision’s Bresnan Broadband Holdings, LLC. However, this failed merger has contributed well towards increasing Charter Communications, Inc. (NASDAQ:CHTR)’s market capitalization as well.
Charter is up nearly 10% this year, and is trading around $160 right now. The stock is 2.5% away from its 52-week high, which it made in July this year. With the looks of it, a new high might just be around the corner.
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