This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Is It Time to Consider Time Warner?

Stocks in this article: TWX DIS CMCSA NFLX HULU AMZN

I have to agree with Bewkes as there have been very few media companies that have matched Time Warner in terms of capital re-investments.

One area where the company has made a considerable amount of investment is in its "TV Everywhere" initiative as it tries to capitalize on the growth of mobile devices. To that end, Time Warner has recently formed partnerships with Comcast and Viacom (VIAB) to allow subscribers access to some of its most popular channels at no extra cost.

These rivals see the writing on the wall as streaming giants such at Netflix (NFLX), Hulu and even Amazon's (AMZN) Prime pose potential threats by offering live TV viewing options to their subscribers. What's more, customers have shown they want this flexibility and prefer to not be confined to their living rooms.

Time Warner understands the future of TV and anticipates that at some point the subscription model will venture on to the cloud. The company is poised to serve as a pioneer in what appears to be a transformation of traditional media.

Bottom Line

For such a mature company, Time Warner never takes its eyes off of the future. This is one of its most impressive qualities. However, that revenue fell slightly this quarter was a disappointment, breaking a string of four consecutive quarters of revenue growth, which dated back to Q3 of 2011. Nonetheless, with a price-to-earnings ratio of 16, lower than both Comcast and Disney, the stock still looks attractive.

What's more, aside from paying a respectable yield, Time Warner is fundamentally sound -- ending the quarter with $3.19 billion in cash and operating cash flow of $3.5 billion.

With shares trading at $44, there is considerable amount of value as the stock should see $50 to $55 during the course of the next six to 12 months. But investors have to be patient for the stock to work -- particularly as it executes its mobile strategy.

At the time of publication, the author held no position in any of the stocks mentioned.

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.

Richard Saintvilus is a private investor with an information technology and engineering background and has been investing and trading for over 15 years. He employs conservative strategies in assessing equities and appraising value while minimizing downside risk. His decisions are based in part on management, growth prospects, return on equity and price-to-earnings as well as macroeconomic factors. He is an investor who seeks opportunities whether on the long or short side and believes in changing positions as information changes.
2 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,164.95 -251.90 -1.45%
S&P 500 1,994.99 -26.26 -1.30%
NASDAQ 4,635.24 -48.1670 -1.03%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs