Talking Numbers

Is Time Warner Cable too expensive?

Is Time Warner Cable too expensive?

Time Warner Cable has more suitors than the protagonist of a 19th century novel.

Cox Communications, Charter Communications, and Comcast (parent company of NBC Universal) are reported to be interested in acquiring the now-$38 billion company spun off from Time Warner half a decade ago.

Here's where it gets interesting: incoming CEO Robert Marcus could have a good reason to want the company acquired. Actually, he may have more than 50 million reasons. Reports estimate that 48 year-old Marcus could receive a payout of $56.5 million if the company is acquired.

(Watch: Faber Report: Cable talk)

Shares in the cable giant are up 13.6% in the past week alone as takeover talk mounts. But, is that too rich for investors to buy the stock?

On CNBC's Street Signs' Talking Numbers segment, Chad Morganlander says any type of deal with another cable company will come under close scrutiny of regulators and is not guaranteed to go through. However, the stock may be priced to for a deal going through, according to the portfolio manager at Stifel Nicolaus' Washington Crossing Advisors.

"The company is trading with the premium built into it," says Morganlander. "Keep in mind the stock has moved over 30% since there's been chatter about a deal. If there isn't a deal, we think fair value range is more or less around the $110 to $120 range, which is well below where we are now."

(See: Media Money)

The only ones who can get real value at these prices are other cable operators looking for synergistic benefits, says Morganlander.

JC O'Hara, Chief Market Technician at FBN Securities, says technical analysis is difficult to use in an "event stock" but it could give some indication of important levels should a deal not go through.

To see O'Hara's chart and the reset of Morganlander's analysis, watch the video above.

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