Anyone touch this stock?

[kjpliny]

Been eyeing Cablevision, symbol CVC. It's currently paying over 5% dividend and it's at about the low end of it's 10 year trading range. COO recently left and went to run another cable company. If you're looking for a dividend play, would this be fairly safe for a long term buy and hold (say 10 - 15 year timeframe)?

 

[haha]

Been eyeing Cablevision, symbol CVC. It's currently paying over 5% dividend and it's at about the low end of it's 10 year trading range. COO recently left and went to run another cable company. If you're looking for a dividend play, would this be fairly safe for a long term buy and hold (say 10 - 15 year timeframe)?

I don't know, but I know that it is rarely a good idea to find a high dividend and work from there.

Ha

 

[Nords]

Been eyeing Cablevision, symbol CVC. It's currently paying over 5% dividend and it's at about the low end of it's 10 year trading range. COO recently left and went to run another cable company. If you're looking for a dividend play, would this be fairly safe for a long term buy and hold (say 10 - 15 year timeframe)?

You're asking a trick question.

"Safe" as an investment term implies "no loss of principal" or "insured yield". So, no, your dividend stock is not safe.

"Long term buy and hold"-- is there anyone else on this board who's held an individual stock for more than 10 years? We're there with the Berkshire Hathaway shares we started buying in 2001, but we've sold some to rebalance. Why would you hold CVC, or why would you sell it? Would you hold CVC for more than a decade, or would you find some rationale to get rid of it?

"Play" implies that you're not investing, you're speculating or gambling. So this probably doesn't have any place in your asset allocation. Of course you could take the UncleMick approach of setting aside 10-15% of your portfolio for testosterone-poisoned hormone-influenced hunches.

With those caveats in mind, I think this is the best blog I've ever seen for individual dividend investors:
Dividend Growth Investor: How to invest in dividend stocks

and I'd also recommend Josh Peters' "The Ultimate Dividend Playbook".

In my opinion, at your current level of analysis you're just eyeballing a value trap.

 

[Texas Proud]

You're asking a trick question.

"Safe" as an investment term implies "no loss of principal" or "insured yield". So, no, your dividend stock is not safe.

"Long term buy and hold"-- is there anyone else on this board who's held an individual stock for more than 10 years? We're there with the Berkshire Hathaway shares we started buying in 2001, but we've sold some to rebalance. Why would you hold CVC, or why would you sell it? Would you hold CVC for more than a decade, or would you find some rationale to get rid of it?

"Play" implies that you're not investing, you're speculating or gambling. So this probably doesn't have any place in your asset allocation. Of course you could take the UncleMick approach of setting aside 10-15% of your portfolio for testosterone-poisoned hormone-influenced hunches.

With those caveats in mind, I think this is the best blog I've ever seen for individual dividend investors:
Dividend Growth Investor: How to invest in dividend stocks

and I'd also recommend Josh Peters' "The Ultimate Dividend Playbook".

In my opinion, at your current level of analysis you're just eyeballing a value trap.

To answer one of your questions... my mom has held onto her Exxon stock for 30 years now... and has reinvested the dividends the whole time... but then again, she is not on the board...

 

[73ss454]

I keep a very small amount of money for trading. I was in and out of this stock many time 2 years ago. It went from about 11 to high 20's till I stopped playing.

I don't know if it's such a good stock to hold as I think they also own Newsday, which is a LINY newspapaer. We all know how well newspapers are doing these days.

 

[clifp]

I put more faith in Morningstar analyst than brokerage analyst. The long term performance of the M* star system outperforms the market by a couple of percent, but it is a far from fool proof.

M* has this to say about CVC.
Cablevision System Corp. 4* Fair value $17 Consider Buy $8.50
Consider Sell $29.75 Uncertainty Very High Moat Narrow.

Bulls Say
•The company's primary service footprint is in the densely populated New York City metroplex, whose technologically progressive and wealthy population is receptive to its premium data and video offerings.
•Even as its markets continue to mature, the firm continues to increase its cable ARPU at an accelerated rate.
•Management raised its dividend twice in the last two years, and is in the midst of a billion dollar buyback initiative.


Bears Say
•The company's substantial debt burden may limit its ability to make future upgrades to its infrastructure, making it tougher to fend off competitors.
•The terrible timing of its $650 million Newsday acquisition from The Tribune Company has magnified Cablevision's exposure to the woes facing the newspaper industry, which we view as an industry in a protracted state of decline.
•The firm's subscriber growth has stagnated, and in 2011, Cablevision saw its customer relationships decline by 37000 to 3.61 million.

It looks interesting enough to put on my radar screen and if drops below $9 probably buy.

 

[CyclingInvestor]

Not with a 10' pole.

-Very short (imo) dividend history
-Very high debt level ($10B+) to income (<$0.2B)
-Questionable capital spending (imo) - buying print media

Even for a stock, I consider this a high risk.

 

[Hamlet]

I would be very leary of any cable stock with the rise of streaming video.

I've cut my cable back to just internet, got Hulu and Netflix, and I don't feel any loss.

I think the whole area is going to face a complete re-ordering over the next decade. There will be some winners, but there will be a lot of bankruptcies as well.

 

[Rustward]

...
"Long term buy and hold"-- is there anyone else on this board who's held an individual stock for more than 10 years?...

Well, I didn't start buying individual stocks until 2003, so not quite 10 years.

These I bought in 2003 and intend to hold:

Exxon Mobil
IBM
JNJ
Pepsico
P&G
Wells Fargo

 

[FIRE'd@51]

I would be very leary of any cable stock with the rise of streaming video.

Why? A number of cable companies are big broadband providers. Think Comcast and Time Warner, for example.

 

[kjpliny]

Thanks for the feedback. I'll probably hold off on this one for a bit seeing how much debt they are carrying. Don't want to catch a falling knife, though perhaps the downside is limited considering how much they have come down recently. I'm actually a subscriber and the service is very good, but who knows what their future is like...

 

[ziggy29]

Why? A number of cable companies are big broadband providers. Think Comcast and Time Warner, for example.

That was my thought, too. If they provide a service that is vulnerable to technological advances, they'd better be positioned well to lead in the emerging technology, too. This is a place where Kodak totally failed. Digital was the future except for a niche market, and they didn't sufficiently embrace it even after it was obvious that digital was the obvious future for the masses.

 

[haha]

Don't want to catch a falling knife, though perhaps the downside is limited considering how much they have come down recently.

You can always rely on a price floor. It's usually at $0

Ha

 

[Hamlet]

Sure, but there is less money in just providing internet access than there is in having a near monopoly that can force people to pay for every channel in existence to get Comedy Central.

My cable bill is $50 dollars less than it was a year ago because all I get from them is internet access.

I'm not saying that some of these companies won't do ok, but their whole business is in flux. They are going to need to own content directly to make real money. People are not going to be willing to pay $120+/month for a middle of the road cable package for much longer.

Why? A number of cable companies are big broadband providers. Think Comcast and Time Warner, for example.

 

[Hamlet]

I've owned my original FAST shares (3 original shares are now 48) since my grandfather gave them to me in 1990 as a high school graduation gift.

Stocks that I've owned for close to 10 years (some were bought in 2003)--

CSCO
MSFT
FAST
JNJ
MCD
TGT
BRKb

"Long term buy and hold"-- is there anyone else on this board who's held an individual stock for more than 10 years?

 

[ReadySkiDaddy]

CVC went from 32 to 10 back in the 2008 crash. So much for "safe". When the baby gets thrown out with the bathwater I'd rather hold gold than these high dividend paying stocks that everyone is flocking to now.

 

[clifp]

I've owned my original FAST shares (3 original shares are now 48) since my grandfather gave them to me in 1990 as a high school graduation gift.

Stocks that I've owned for close to 10 years (some were bought in 2003)--

CSCO
MSFT
FAST
JNJ
MCD
TGT
BRKb

For me INTC (going back to 1984), JNJ, UPS, and BRKA. I have about a dozen that I've bought back in 2005/2006 since subscribing to the M* Dividend Investor newsletter. I found it is a lot easier to hold dividend stock than non dividend ones.

 

[ReadySkiDaddy]

For me INTC (going back to 1984), JNJ, UPS, and BRKA. I have about a dozen that I've bought back in 2005/2006 since subscribing to the M* Dividend Investor newsletter. I found it is a lot easier to hold dividend stock than non dividend ones.

By the way, Mark Hulbert has been tracking the performance of investment newsletters since 1980 in his Hulbert Financial Digest. Research indicates that these newsletters generally are not going to make you any more money than if you were to just invest in unmanaged index funds

 

[rodi]

I have to agree with Hamlet.

The model of the cable industry is changing. Much more 'over the top' services that are separate from the cable providers (except perhaps as broadband access providers).

Consider this moment in time to be similar to when HD tv's first came out a decade ago... most people still had their old analog tv's... but over a few years, prices came down and most people got their plasma or LCD HD tvs. The same is happening in the cable space... Early adopters are already out of cable, going for over the top solutions... More will follow and it will snowball.

I might make a short term play, but it's not a long term hold unless the company shows it has a plan to adapt to the changing market.

Just my opinion... YMMV.

 

[clifp]

By the way, Mark Hulbert has been tracking the performance of investment newsletters since 1980 in his Hulbert Financial Digest. Research indicates that these newsletters generally are not going to make you any more money than if you were to just invest in unmanaged index funds

I know but I've follow M* dividend investment newsletter since the beginning and it has outperformed the S&P by a couple points. More importantly for me during the 2008 crisis dividend stock exhibited substantially lower volatility than the broad market indexes.

 

[Nords]

Thanks, guys, I stand corrected on this board's stock buyers & holders. Good to see.

I agree, Clif, a dividend stock is a lot easier to hold. Which doesn't explain Buffett's refusal to pay one-- "buy & hope"?