Strong Foundation Helps Support Cox

Publish date:
Updated on

SunTrust Robinson Humphrey cable analyst Gary Farber reiterated his "buy" rating on Cox Communications Inc., citing its strong fundamentals in the midst of accounting scandals at Adelphia Communications Corp. and WorldCom Inc. In his report, Farber said that despite the pressure on cable stocks, investors appear to be willing to pay more for quality. Cox is less of a risk because it trades at a slightly higher multiple than the rest of the sector (11.3 times 2002 cash flow, compared to 10.2 times for the rest of the sector), and due to its higher degree of earnings and free-cash-flow visibility.