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  • Comcast - A Buy With Burke Leading NBCU 0 comments
    May 2, 2012 11:03 PM | about stocks: CMCSA

    I am going to buy as much Comcast (NASDAQ:CMCSA) as I can get my hands on. Why? Because every piece of television I watched yesterday is a product of NBCU, and I bet it's the same for you.

    From networks such as CNBC, E!, Golf Channel to any of my favorite sitcoms including The Office, 30 Rock, Are You There, Chelsea? or Up All Night; the depth of the NBCU lineup is unbelievable. This winter I watched the Super Bowl on NBC.com from the Hong Kong airport, this spring I have been glued to the NHL Playoffs and this summer I, along with millions of other people looking for something to cheer for, will be tuned into the 2012 Olympics.

    Looking at the breadth and quality of their offerings; it only makes sense to be long Comcast.

    I buy stock in companies that produce quality products. I own Apple because I'm always on my iPhone, Nike because I look like a "Just Do It" commercial when I run outside and Comcast; because I consume their product(s) almost all day.

    Comcast is down this morning, despite a large earnings beat as investors seem to be taking cash off the table in light of a disappointing jobs number this morning & Comcast's recent run (+29% YTD). Comcast's profit rose 30% as the media giant benefited from a 5% increase in broadband subscribers and revenue from it's NBCU unit rose 18% to $5.47 billion dollars.

    Specifically bolstered by advertising revenue related to the Super Bowl, the NBCU unit carried the company to the strong beat.

    Most analysts and authors out there this morning took Comcast CEO Brian Roberts at his word when he warned Comcast's first quarter is traditionally the company's best and not to expect results like the 1Q numbers for the rest of the year.

    However, this year is different and there is one man who is to thank: Stephen Burke. Burke, who spearheaded the On Demand platform and led the successful integration of the AT&T broadband network during his tenure as President of Comcast Cable, is at it again creating value for shareholders and putting the 'team on his back'.

    Burke, who since taking the reins negotiated and inked the deals that brought the NHL Playoffs and 2012 Summer Olympics to NBC networks, has television in his blood (Father was a TV Exec) and it is evident.

    Although many analysts say that the most predictable revenue stream for the company is it's cable subscription service, I believe the most predictable event in this hazy economic environment is that I will turn on CNBC every morning, root my Philadelphia Flyers on in the NHL Playoffs, watch my favorite shows and be glued to the NBC networks during the Olympics this summer.

    According to numbers released Friday, I am not alone, as 929,000 viewers tuned in for the first round of the NHL Playoffs - which ranks as the highest level ever. Want advertising revenue? Put every game on national television and have 32 one-goal games and 16 overtime games. Boom.

    I'm not saying it generates the same per ad revenue as the Super Bowl, but the Super Bowl is one game. With a few weeks of the NHL Playoffs and a few weeks of the 2012 Olympics from London, I expect the 2Q & 3Q results from Comcast to be again carried by revenue generated by NBCU and Steve Burke.

    Disregarding the sporting event driven revenue, the company has additionally successfully focused on it's broadband service and as mentioned earlier, it's TV lineup is unrivaled.

    Now if the cable & broadband units don't carry their weight, Comcast could struggle despite the strength of NBC but assuming they continue to at least flat line, Comcast is a buy. Unless of course you actually enjoy watching washed up hosts on late night (Jimmy Kimmel on ABC) or take pleasure in overproduced reality shows like its 2001.

    Disclosure: I am long CMCSA.

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