Mediacom Gets a (Brief) Lift
by Mike Farrell -- Multichannel News, 6/9/2008
Mediacom Communications shareholders were able to reap some profits last week, but they had to be quick on the trigger.
The surge in Mediacom stock happened early on June 2, shortly after Pali Research media analyst Rich Greenfield raised his rating on the stock from “neutral” to “buy.”
In morning trading, Mediacom stock surged as much as 24% ($1.51 per share) to $7.72 each. But it didn't last long — the stock settled back to $6.76 later that morning and closed at $6.35 per share (up 14 cents or 2%) at the end of the day. About 1.4 million shares traded hands that day; more than triple the previous trading day's volume of 454,605.
In his note, Greenfield noted the stock has appreciated about 35% in the past five months, when he upgraded the stock from “sell” to “neutral.”
Greenfield was encouraged by the company's success with the triple play in the first quarter — Mediacom was able to add basic customers for the first time since 2005 in the period — and that competitive threats don't seem to be as severe as once thought.
Greenfield noted that Mediacom was hit hard in 2007 by satellite competition taking advantage over programming battles with Sinclair Broadcasting and the Big Ten Network. And though the Big Ten battle still looms, “we believe the pressure on [Mediacom] has subsided for now,” Greenfield wrote.
