Thanks Be to Cable for Strong Results
By Joseph Griesbeck, CFA - Editor, Ownership Intelligence
02 Nov 2011
Overbearing parents may blame cable television for its effects on children, but media companies Time Warner and Comcast praise its programming. Thanks to their cable networks, these companies reported stronger earnings today, though investors responded minimally, as though they were left staring at the TV for too long.
Both classes of Comcast shares are flat after the earnings announcement. Dodge & Cox and Cap Re Global each hold more than 100 million shares of the Class A share, but Cap Re owns $767 million worth of Special A shares while Dodge holds very little.
Sumitomo Trust recently bought $170 million in both classes, so it must expect more to come from the broadcaster.
Advertisers boosted revenues for Time Warner’s networks like TBS and TNT, but the market is trading TWX down by more than 2%. Dodge & Cox owns $1.9 billion, the largest institutional position in the company, even after selling $50 million worth of the stock before Q3 began.
AllianceBernstein sold 13 million shares during Q2 2011, possibly due to shared sentiments with analysts over Time Warner’s future growth. Marsico Capital, though, saw a bright Q2 for the company as it bought 15.6 million shares in Q2, worth half a billion dollars at yesterday’s close.
Investors like Dodge & Cox that have significant chunks of their assets in the television companies will need advertisers to continue their spending, or else the cable may go out.
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