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Here's Why Investors Should Retain Charter (CHTR) Stock

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On Aug 31, we issued an updated research report on Charter Communications Inc.  (CHTR - Free Report) , the second largest cable MSO (multi service operator) in the United States.

Recently, the company launched lucrative promotional offers in order to stay competitive along with a strong subscriber base. In fact, the cable company is offering a double-play package of Spectrum TV (more than 130 channels) and 60 Mbps internet (100 Mbps in some markets) for $29.99 each.

The Spectrum TV was launched by Charter Communications, after the twin buyout of Time Warner Cable and Bright House Networks, and is aimed at uniting the viewing experience of these two big MSOs on a single podium. 

Additionally, Charter Communications has been undertaking various initiatives to make its Spectrum products even better. The company has developed its cloud-based user interface named Spectrum Guide, to run on all set-top boxes offering advanced video navigation. Also, it has initiated the rollout of its Spectrum WiFi, which provides unlimited Internet access to residential customers even when they are outdoors.

Notably, such initiatives are primarily focused on to lure more subscribers.

Charter Communications currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Going forward, we anticipate the wireless venture of Charter Communications in collaboration with Comcast Corporation (CMCSA - Free Report) . For this much-hyped wireless venture, both companies have already signed a Mobile Virtual Network Operator agreement with U.S. telecom behemoth Verizon Communications Inc. (VZ - Free Report) to utilize its wireless network.

Consequently, shares of Charter Communications have rallied 23.1% compared with the industry‘s growth of 8.8% over the last six months.

We are however, concerned about the company’s operation in a saturated and competitive multi-channel U.S. video market.

Meanwhile, online video streaming service providers such as Netflix Inc. (NFLX - Free Report) ,, YouTube etc., pose severe threat to cable TV operators because of their extremely cheap source of TV programming, which is in vogue even during volatile economic conditions.

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