10-Year Projections: Cable's Growth Story Persists

摘要

They've done it before and we think they'll do it again. According to our exclusive 10-year projections, cable MSOs are on track to more than double total revenues from $66.5 bil. in 2005 to nearly $139 bil. by 2015. But despite the fact cable operators have proven time and again they can survive and thrive in an intensely competitive world, Wall Street still finds reason to fret over cable's future and to undervalue its stock. As of close 6/28, our basket of cable pure plays traded at just 8.5x' 06 cash flow (see P. 12). Cablevision's 6/19 decision to buy out public stockholders (see P. 8)—the third cable MSO privatization in less than a year—should perhaps come as no surprise. Cablevision, following in the footsteps of Cox and Insight, is merely taking advantage of the unrelenting public/private discount: buying stock back on the cheap to retreat from the Street's perennially myopic public eye.