NEW YORK (TheStreet) -- Charter Communications (CHTR) - Get Report is the country's fourth-largest cable operator, and something about the company has piqued the interest of famed investor Warren Buffett, said TheStreet's Jack Mohr.
In August, Buffett's Berkshire Hathaway (BRK.A) - Get Report (BRK.B) - Get Report took a 2.3 million share stake in Charter. At the time, the value of that stake was just over $365 million. Its value is largely unchanged today, Mohr explained to TheStreet TV.
But Mohr says investors should be looking at Charter Communications for their portfolios, too. Shares of the $17 billion market cap company have fared well in 2014, up 16%. However, the company is about to get a significant boost.
Charter originally tried to acquire Time Warner Cable (TWC) . The attempt failed and Time Warner Cable decided to merge with Comcast (CMCSA) - Get Report . But Charter isn't the loser in this deal. In order to clear anti-trust regulatory hurdles, Comcast was required to drop 1.5 million of its Time Warner subscribers, Mohr said. Conveniently, those users were sold to Charter.
Mohr said the deal will nearly double the number of Charter's current video customers, making it the second-largest cable operator in the U.S.
The Comcast-Time Warner Cable deal is expected to close in early 2015. But now that Charter is solidifying itself as a true U.S. cable provider, investors should think like Warren Buffett and consider the stock after this "game-changer" of a deal, Mohr concluded.
-- Written by Bret Kenwell
TheStreet Ratings team rates CHARTER COMMUNICATIONS INC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate CHARTER COMMUNICATIONS INC (CHTR) a HOLD. The primary factors that have impacted our rating are mixed ? some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its solid stock price performance, impressive record of earnings per share growth and revenue growth. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk, poor profit margins and weak operating cash flow."
You can view the full analysis from the report here: CHTR Ratings Report