Today's Research on DirecTV and Comcast: Cable Companies Fight to
Retain Subscribers
LONDON, February 5, 2013 /PRNewswire/ --
Cable TV segment
is fraught with competition. The cable companies are not only
facing competition from each other, but are also battling with
newer competitors like video streaming services. While the biggest
challenge for the industry is to retain its subscriber-base, many
of its players are planning to diversify through acquisitions.
DirecTV Inc. (NASDAQ: DTV) is looking to expand itself in Latin
markets, whereas Comcast Corp. (NASDAQ: CMCSA) is ramping up its
technological infrastructure to counter the competition. StockCall
analysts have recently posted technical reports on DirecTV and
Comcast. These free analyses are accessible upon signing up at
http://www.stockcall.com/analysis
DirecTV Looks for
Expansion in Latin America
DirectTV is currently facing stiff competition for its bid for
GVT phone unit in Brazil. While
the company is interested in acquiring the unit to create
synergistic benefits, private equity firms Consortium consisting of
Apex Partners and KKR & Co. is all set to go for bank financing
to clinch the deal. However, Consortium is currently bidding at
$6.8 billion, in contrast to the
asking price of 8 billion Euros. The
acquisition is important for DirectTV as it will help the company
in augmenting its position in Latin
America. However, it is unlikely that the company would be
willing to get into a bidding war for GVT, which is owned by
Vivendi SA. Sign up for the free technical analysis on DirectTV
at
http://www.StockCall.com/DTV020513.pdf
DirectTV is also diversifying its portfolio as it financed
FreeWheel, which deals with web video ads. The company is scheduled
to announce its fourth quarter numbers on February 14 and it is likely to report a 7
percent improvement in its revenue whereas its EPS is expected to
increase by 11.8 percent. However, the cable company is facing
deteriorating margins as its gross margin declined 1.9 percent in
the third quarter. DirectTV also added 100,000 new subscribers
during the fourth quarter and thus performed better than its peers,
which are facing declining subscriber-base. DirectTV stock grew 15
percent in the past 12 months and it is likely to continue the
trend, despite recent declines in the price.
Comcast Hits 52
Weeks High
Comcast Corporation recently hit a 52-week high. The company
recently collaborated with Intel to let its subscribers access live
video without hooking up additional hardware. The new deal will
also make it easier to stream on demand videos. With this step, the
company is clearly moving towards strengthening its on-demand video
service. Comcast launched its streaming subscription service in
2012 and it is likely to make significant contribution to the
company. However, it is unlikely to make up for the losses the
company is sustaining on Pay-TV front, where it has been
consistently losing subscribers. Register today and download for
free our research on Comcast at
http://www.StockCall.com/CMCSA020513.pdf
Comcast is also improving its infrastructure as it moves ahead
with the use of cloud technology to provide more interactive
services to its subscribers. While these steps are expected to
increase its capex, in the long-run the company will get to reap
the benefits. The company is also growing through acquisition as it
recently paid $150 million to acquire
stake in the set top box manufacturer Arris Group. While the stock
is a little pricey right now, any pullback can provide comfortable
entry point for investors. The stock is current trading at P/E
ratio of 17.44 in comparison to 12.57 Price Earnings multiple
sported by its rival DirecTV.
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