Where Will Time Warner Cable Go Next?
With shares of Time Warner Cable (NYSE:TWC) trading around $136, is TWC an OUTPERFORM, WAIT AND SEE, or STAY AWAY? Let’s analyze the stock with the relevant sections of our CHEAT SHEET investing framework:
T = Trends for a Stock’s Movement
Time Warner Cable is a provider of video, high-speed data, and voice services in the United States, with systems located in five geographic areas: New York, the Carolinas, Ohio, Southern California, and Texas. The company offers its residential and business services customers numerous services over its broadband cable systems. With such a large and growing user base, look for Time Warner Cable to continue to see rising profits from its media, entertainment, and communications offerings.
The city of Los Angeles is suing Time Warner Cable over unpaid franchise fees, the Los Angeles Times reported Saturday. The city claims that Time Warner owes more than $9.7 million in payments, even as the company took in approximately $500 million from the city’s customers each year. The money, city officials told the publication, could have helped to ease its budget problems during the financial crisis. The $9.7 million the city is seeking is comprised of four years’ worth of unpaid fees, including approximately $2.5 million in franchise fees, as well as public, education, and governmental channel fees from 2008 and 2009, in addition to approximately $7.2 million from between 2010 and 2011.
The Los Angeles Times notes that the lawsuit comes just a few weeks after the company announced it would raise prices yet again by an average of about 6 percent per month to homes that aren’t covered by a promotional package. Those higher bills are expected to affect about 30 percent of the approximately 1.5 million subscribers in the Los Angeles area.