Is Time Warner Cable a Solid Investment?

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With shares of Time Warner Cable (NYSE:TWC) trading around $134, 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.

Time Warner Cable Chair and CEO Rob Marcus has drawn a $160-per-share line in the sand. Marcus reiterated to Multichannel News that the No. 2 U.S. cable operator is not interested in Charter Communications’ $132.50-per-share bid for the company. ”We were very explicit: We’re not negotiating,” Marcus told Multichannel. “$160 is what it takes to get anything done.” Marcus went further to say that $160 must include $100 per share in cash with a “20 percent collar.” He mentioned, “If any of those elements are not there, then $160 is not interesting.”

Charter Communications made a $61 billion takeover bid for Time Warner Cable, but the company rejected the offer, with Marcus labeling the $132.50-a-share bid as a “low-ball offer.”

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