No. 2 - Your Digital Future
By: Time Warner (TWX)Comcast (CMCSA) and other cable companies, with their already established links to your homes, are fast becoming one-stop shopping for all your interactive needs. That's TV, phone and internet.
In fact, Charter Communications (CHTR), a St. Louis cable company controlled by billionaire Paul Allen, said today that it added 30% more telephone subscribers last quarter. The news sent Charter shares up more than 4%.
Meanwhile, Time Warner this week also had glowing things to say about its triple play progress.
What's the best way to trade this growing trend and what does this mean for the Verizons (VZ) of the world?
Pali Research Media Analyst Richard Greenfield joins the guys for this conversation.
Dylan asks how are the cable companies “really” doing?
“Great!” answers Greenfield. Customers like having all these services in one place.
How are the phone companies doing, selling the same thing?
“It’s tougher for them,” replies Greenfield. The phone companies are not nearly as far along selling video, as the cable companies are selling phone service. It’s going to take years for the phone companies to catch-up.
Greenfield adds the way to make money in the space is to invest in companies that are highly leveraged, because they don’t have the money to toss around. In other words leverage companies must focus on driving cash flow from the core business. He likes Charter and Cablevision (CVC).
Dylan asks the guys what they think.
Jeff Macke says it’s not an "either or" scenario. He likes the marriage of phone and cable. And he likes the satellite providers, too.
Greenfield says satellite can’t bundle products. The only companies that can provide the triple play are cable and phone companies.
Tim likes Verizon (VZ) because of the margins in their wireless business.
Guy Adami and Eric Bolling both like AT&T (T).
Questions? Comments? fastmoney@cnbc.com
Trader disclosure:
On May 3, 2007, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders:
Macke owns (SWY), Strazzini owns (JBLU),(VZ); Bolling owns (DIS, (TSO) Puts,
Pali Capital Acts As An Underwriter In The Public Offering Of Securities And Structured Products Strazzini's Statements Are Not An Endorsement Of Such Securities Or Structured Products
Strazzini's Statements Are Not An Endorsement Of Any Offering Of Such Securities Or Structured Products
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