Regular readers know I own the Class A Special series of Comcast stock (ending in a 'K' instead of an 'A'). In fact, Priest says the company is his top pick in the communications sector:
The Philadelphia company is a leading broadband communications company. Its upgraded broadband network is a competitive advantage allowing the company to deliver multiple services at low incremental cost and reignite growth. With upgrade capital spending largely complete, Comcast has begun to generate meaningful amounts of free cash flow, which it has begun to deploy in shareholder-friendly ways.
Over the last two years, Comcast has repurchased almost $6 billion of common stock or equivalents. It has $3.9 billion remaining on its share-repurchase authorization. Applying current multiple to year-ahead free cash flow suggests Comcast will generate a return of over 20% in the next 18 months.
As a shareholder, I applaud the company's stock buybacks. CEO Brian Roberts seems like one sharp dude and deserves enormous credit for not only repurchasing shares, but repurchasing a meaningful amount of them. Lots of companies announce plans to repurchase up to a certain number of shares -- with up to being the words to watch out for -- and never buy back anywhere near enough of their shares.
Some may quibble with Roberts for not paying a dividend. But the amount of money Comcast is using for its share buybacks leaves that criticism muted, at least for me.
Comcast was first recommended on Controlled Greed at $26.73 per share last November. The stock ended yesterday at $34.28, so it's up 28.3% since being bought. The company announced good results last week.
CMCSA 1-yr chart: