Reuters is quick to point out that cable companies, which use to be good defensive plays in choppy markets, may be losing that distinction. Maybe.
The old notion was that when the economy was tight, people stayed home and watched TV, but Reuters writes: "now that monthly cable bills are higher due to "triple play" packages that include telephone and Internet service fees, some analysts are questioning whether cable is still a defensive stock."
Comcast (CMCSA) now get over $100 a month for some of their entertainment and VoIP packages.
Cable firms still trade at low valuations to EBITDA, but shares of the big players have been falling. So far this year, Comcast shares are off almost 8% while telecom rival AT&T (T) is up 12%. Since AT&T is losing landline customers to cable VoIP, one would think the numbers would be the other way around.
The demise of cable companies as value investments in overblown. The "triple play" of broadband, VoIP, and TV may be rising above $100. But, the cost of buying those services from the telephone company and satellite TV firms is in most cases still higher than getting it bundled.
Cable will do well because it offers the largest number of services at the lowest price.
Douglas A. McIntyre
Essential Tips for Investing (Sponsored)
A financial advisor can help you understand the advantages and disadvantages of investment properties. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
Investing in real estate can diversify your portfolio. But expanding your horizons may add additional costs. If you’re an investor looking to minimize expenses, consider checking out online brokerages. They often offer low investment fees, helping you maximize your profit.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
