Wyatt Research Week in Review: May 24-30

It was a short trading week with the markets closed Monday in observance of Memorial Day. But it was a very big week for John Malone.
Charter Communications (NASDAQ: CHTR) announced Tuesday that it has agreed to acquire Time Warner Cable (NYSE: TWC) for $55.3 billion. Charter is backed by Liberty Broadband Corp. (NASDAQ: LBRDK), one of the many companies in Malone’s media empire. As part of the agreement, Charter will also acquire the smaller cable provider Bright House Networks.
If the deal passes what is certain to be a rigorous regulatory review process, the newly combined entity will have more than 23 million customers – second only to Comcast’s (NASDAQ: CMCSA) 27.2 million customer accounts.
The blockbuster Charter deal comes just a month after Comcast officially abandoned its proposed acquisition of Time Warner Cable. The long-festering Comcast plan ran into significant pushback from the Federal Communications Commission and the U.S. Department of Justice, as well as such outspoken congressional critics as Rep. John Conyers and Sen. Al Franken.
For Malone – the billionaire media mogul who got his start in the cable TV industry in the early 1970s – the acquisition is particularly sweet. Shortly after he acquired a 27% stake in Charter in 2013, the company made several ill-fated stabs to buy Time Warner Cable – culminating in a disastrous hostile takeover attempt in early 2014 that was trumped by Comcast’s offer.
For full analysis of the Charter-TWC deal, as well as speculation on what’s next for the cable industry, I invite you to check out Wyatt Research analyst Tony Daltorio’s breakdown.
And while I’m at it, here are a few more reading recommendations from this week’s Wyatt Investment Research output:
Why Nelson Peltz’s Loss Is a Win for DuPont Shareholders – DuPont (NYSE: DD) spent $15 million to fend off activist investor Nelson Peltz and his Trian Partners, which had proposed breaking the company up into multiple entities. But it’s a small price to pay for DuPont’s large shareholder base of retail investors and major index fund managers, such as Vanguard and BlackRock (NYSE: BLK).
How to Profit from the Generic Drug War – There’s an odd three-way M&A tango going on in the generic drug industry between Teva (NYSE: TEVA), Mylan (NASDAQ: MYL) and Perrigo (NYSE: PRGO). Here’s how to play it.
The Most Underrated Tech Dividend Stock – The most underrated tech dividend stock generated nearly $5.2 billion in free cash over the last 12 months and trades at a forward price-earnings ratio of 13.5. It also recently announced an accelerated $5 billion stock buyback plan.
Is Google in Trouble? – Shares of the search engine giant are down 5% in the past two years, which is well below the 14% return for the S&P 500 index. Here’s what Google should do to right the ship and reward its loyal shareholders.
Still the Best Income Investing Strategy – Is there one best income investing strategy? It’s a frequent question in the current low interest rate environment. But according to Wyatt Research expert Steve Mauzy, there is one income investing strategy that appears to trump all other strategies over time. It’s what he refers to as “Ninth Wonder investing.”
An Untapped Biotech Growth Sector – Biotech is a hot topic, given that the stocks in this sector are delivering their fifth consecutive year of market-leading gains. Industrial biotech, however, isn’t exactly a sexy area of the market. But manufacturers are increasingly turning to bio-based chemicals for use in everyday products – including clothes, plastics, personal care products, paints and even food.
The No. 1 Drugstore Stock to Buy Now – CVS Health’s (NYSE: CVS) $12.7 billion buyout of pharmacy services company Omnicare (NYSE: OCR) has put the pressure back on competitor Walgreens Boots Alliance (NASDAQ: WBA). Which stock has the biggest potential?
HP’s Big Moves: What Hewlett-Packard Investors Need to Know – Following a disappointing earnings report, Hewlett-Packard (NYSE: HPQ) announced that it’s selling its majority stake in a newly-formed data networking business in China. Sentiment from analysts and large investors was fairly mixed on both news items, leaving investors in a curious position. Here’s a clearer takeaway.
Will John Malone Buy Vodafone? – As if Malone isn’t in the news enough these days, last week he told Bloomberg News that European telecom giant Vodafone Group (NASDAQ: VOD) would be a “great fit” for his Liberty Global (NASDAQ: LBTYA). Does a Liberty-Vodafone merger make sense, and what are the chances it could actually happen?
Have a great weekend!