Bouncing Into Boston

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Remember the National Show
bounce? Longtime cable investors do. The industry’s
national convention, now called the
Cable Show, used to help juice cable-operator
stocks after analysts got in-depth briefings,
new technology got shown off and, occasionally,
big deals or investments got announced.

After consolidation and privatization, there
are only really four U.S. cable-operator stocks.
Glancing at our magazine’s stocks page (87),
you can see the best story at the moment is
Charter, coming off a strong quarter with Tom
Rutledge at the helm and always a candidate
for possible asset sales. It hit a 2012 high in recent
days and at last Wednesday’s close was at
$65.30, more than $7 above a year ago.

Time Warner Cable is holding steady in the $76 range,
bolstered by its dividend and stock buybacks. Comcast,
having taken big strides in stemming video subscriber
losses, at $28.46 was some $5 better than a year ago.

Cablevision, minus former COO Rutledge, is struggling at
below $12. Still, longtime analyst Tom Eagan, now at Canaccord
Genuity, likes CEO Jim Dolan’s company as a turnaround
play in 2013, with a focus on revenue and cash-flow gains.

Eagan (also as noted on our stocks page) expects
an upbeat mood at Cable Show 2012 in Boston this
week. Regulatory risk has been “largely abated,”
he notes, and, crucially, cable efforts at embracing
disruptive technologies to create new services are
paying off. “TV Everywhere,” or extensions of cable
content beyond the coaxial-connected set-top box,
is helping to make the iPad, the Xbox, the Roku device
an ally instead of an enemy.

“We expect more widespread adoption of this
innovation to contribute to improved churn
and greater bundling,” Eagan said.

While satellite and telco providers continue
to grow and take video share from cable, broadband
and voice customers are increasingly going
to cable (as illustrated in this week’s cover story).
The business is fundamentally healthy. As affirmed in overbuilder
Knology’s successful auction last month, cutting a
deal to sell out to another competitive triple-play provider,
Avista-backed WideOpenWest, for $1.5 billion in cash.

Will any bombshells drop in Boston? Unlikely, but who
knows. One thing’s for sure: Cable companies have good
reason to have a bounce in their step this week.

See you at the show!