NEW YORK (TheStreet) -- Shares of Time Warner Cable Inc. (TWC) are sliding, down 3.51% to $138.56 in morning trading Monday, after President Barack Obama called for the Federal Communications Commission to implement the "strongest possible rules to protect net neutrality."
Obama said the FCC should create a new set of rules to make sure that cable and phone companies will not be able to act as gatekeepers, restricting what users do or view online. He outlined rules including no blocking of content, no throttling of content speeds, increased transparency between consumers and Internet service providers, and no paid prioritization.
Net neutrality refers to the principle that Internet Service Providers and governments should treat all data online equally without discriminating or charging different costs by user, content, site, platform, application, type of attached equipment, or mode of communication.
Separately, TheStreet Ratings team rates TIME WARNER CABLE INC as a "buy" with a ratings score of B+. TheStreet Ratings Team has this to say about their recommendation:
"We rate TIME WARNER CABLE INC (TWC) a BUY. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, reasonable valuation levels, good cash flow from operations, solid stock price performance and expanding profit margins. We feel these strengths outweigh the fact that the company has had sub par growth in net income."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Despite its growing revenue, the company underperformed as compared with the industry average of 9.4%. Since the same quarter one year prior, revenues slightly increased by 3.5%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- Net operating cash flow has increased to $1,448.00 million or 19.76% when compared to the same quarter last year. In addition, TIME WARNER CABLE INC has also modestly surpassed the industry average cash flow growth rate of 19.11%.
- Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period, despite the company's weak earnings results. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- 35.95% is the gross profit margin for TIME WARNER CABLE INC which we consider to be strong. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 8.73% trails the industry average.
- You can view the full analysis from the report here: TWC Ratings Report