Turn on Time Warner
In my Wall Street Survivor portfolio I had to clear some deadwood. GOL Linhaus Aereas Inteligentes SA ( GOL ) and Cytori Therapeutics ( CYTX ) just quit performing the way I wanted them to. Both have dropped below their 20, 50 and even 100 day moving averages, so they have no place in my momentum based portfolio.
I wanted a large more stable company for my portfolio so I used Barchart to screen the S&P 500 stocks having the highest relative strength and Time Warner Cable ( TWC ) was near the top of the list. It has been a long time since I looked at cable TV companies and thought of them as just a simple utility company where you take the number of subscribers times the monthly rate and there you have revenue. Things have changed.
I looked at my own TWC bill and discovered that I now have HDTV, Internet, phone, equipment rentals and some extra pay for view movies on the bill. My wife has been paying the bills so I didn't realize my old bill of $24.95 has grown to a base of $165.00 per month plus some extra movie charges. 15 years ago I hadn't imagined all the bundled services I'd be using. Not a simple revenue model anymore.
Since I' m a victim of their revenue model I wondered how the investing numbers looked.
The stock has enjoyed a 13.45% price increase in the last month and hit new highs in 9 of the last 20 trading session and was 4 for 5 recently. I looked at the technical indicators on Barchart and there were 13 out of 13 buy signals for a 100% technical buy rating.
Checking in with Wall Street, 15 buy and 9 hold recommendations have been released. They estimate level but slowly growing sales of 3.9% for both this year and next. They have a brighter prediction of increased earnings per share with an increase of 14.4% expected this year, followed by 13.5% next year and a 5 year annual EPS growth rate of 8.28% forecasted.
Investor sentiment on Motley Fool is high with the CAPS members voting 157 to 36 that the stock will out perform the market with the All Stars in agreement 53 to 5. Fool noted that the Wall Street columnists they follow have written favorable articles by a count of 17 to 0.
My stock replacement has:
1 - Increasing price momentum with technical support on Barchart
2 - A solid Wall Street backing with increases in earnings projected out for at least 5 years
3 - Positive investor and Wall Street columnists sentiment.
The stock is selling around 53.72 with a 50 day moving average of 47.
I'm adding Time Warner Cable (TWC) to my Wall Street Survivor portfolio but before you consider adding the stock to your portfolio please do complete due diligence. Every investor and portfolio has unique needs.
Jim Van Meerten in an investor who writes on financial matters here and on Financial Tides. Please leave a comment below or email JimVanMeerten@gmail.com
Disclosure: I do not hold a position in TWC at the time of publication