Back to top

Analyst Blog

Time Warner Cable Inc.’s (TWC - Analyst Report) board of directors has decided to raise its share repurchase authorization to $4 billion immediately. This decision reflects management’s confidence on the company’s future growth. However, the timing of share repurchase will be based on suitable market condition. Time Warner cable currently has a Zacks Rank #3 (Hold).

In the U.S., cable operators are facing fierce competition from telecom service providers. Verizon Communications Inc. (VZ) and AT&T Inc. (T) are quickly gaining market share from cable MSOs by offering fiber-based TV and other high-speed broadband services. Online video streaming service providers, such as Netflix Inc. (NFLX), Hulu.com, YouTube etc., have become a big threat to cable TV operators.

We view the change in Time Warner Cable’s business model positively. As a surviving strategy, management has decided to adopt a four-edged approach: (1) rebrand itself as a major broadband service provider for residential customers, (2) aggressively penetrate the commercial business segment, (3) change in marketing strategy like product segmentation and (4) significant enhancement of shareholders’ wealth, such as systematic share repurchase and increase in dividend rate. 

Time Warner Cable is concentrating on broadband and digital phone services, especially for the Business segment, which has become a major growth driver for the company. It has undertaken a massive "Ethernet Everywhere" strategy and is boosting cloud computing services including delivering IP-based Ethernet services over fiber, where the company has already laid its optical cables. The company also used high-speed DOCSIS 3.0 technologies over its extensive hybrid fiber/coax plant.

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
RPC INC RES 24.91 +8.35%
LITHIA MOTO… LAD 94.59 +4.60%
DELTA AIR L… DAL 39.15 +3.90%
FLAMEL TECH… FLML 14.51 +3.50%
SOUTHWEST A… LUV 28.87 +2.92%