Featured stock of the month: $CHTR Charter Communications

Charter Communications (ticker: $CHTR ) is a media sector company which provides cable services to residential and commercial customers in the United States.

It offers subscription-based video services and also provides internet services as well as other media-related services.

The company was founded in 1993 and is based in Stamford, Connecticut.

As of the end of last year it had 29 million residential and small and medium business customers.

It has a market cap in excess of 100 billion USD and can therefore be categorised as a large cap stock.

While it is currently trading at a trailing P/E of 61, it has a forward P/E of 26.6 which does not make it expensive considering that it is a growth stock with excellent track record.

In fact, based on current estimates, it is expected to grow its earnings by 45% over the next 5 years which corresponds to a 5 year expected PEG ratio of 0.84, implying that it is currently trading at a discount.

As it is a growth stock it does not offer a dividend. Despite that, it has profusely rewarded its investors over the past years, with more than a 36% capital appreciation per year in the last 3 years and a stunning 30% per year over the past 10 years. For comparison, investing in a S&P500 ETF over the same 10 years would have yielded a 9.4% annual return.

YTD the stock is actually up, sporting a 3.9% increase, while the S&P500 is down 11.8%.

Charter communications is also a primus inter pares (first among equals) as it has fared better than its peers and outperformed $XLC (a popular communications services ETF which also features the stock amongst its holdings) by 36% over the past year.

The stock has a beta of 0.8 which makes it less volatile than the stock market average.

The company reported Q1 earnings on May 1st missing expectations. However, it showed a significant rise in customer numbers as well as in revenue which made the stock go up after the earnings release.

From a technical analysis perspective, the stock is well above the Fibonacci 61.8% retracement line from its mid February 2020 highs which may indicate further short-term upside potential.

CHTR

If you want to find out which other long positions I hold in my eToro portfolio, please follow this link.

 

A successful short term trade on $EHTH

Another week of consistent recovery for the US stock market as well as for many others around the world. I remain cautious and still hold onto some hedges because this sudden reversal cannot be fully trusted and due to it being reportedly fueled by a short squeeze for the most part.

While I like to make investments for the long term, I do occasionally perform short term trades and this week I have managed to pull two off! One of them could be traded on eToro and related to eHealth (ticker: $EHTH ). What happened is the classic short selling amplified by the media, with a stock which was trading at 136$ until last week and dropping to below 100$ on Wednesday. I took the opportunity, bought at 99$ and exited at 114$ over the course of two days ! I believe the stock has the potential to go even higher and if I was a more aggressive investor, I would hold on to part of it, but decided to lock in the profit this week.

20200410

There were two more positions we closed this week, on two of the food-related stocks owned in my eToro portfolio, both with a 5% gain, Conagra Foods (ticker: $CAG ) and General Mills (ticker: $GIS ). These were both sold with the automatic sell function available on eToro. I am ready to get back into these two but when any my positions goes above a 10% gain, I have a take profit ready at 5% in order not to give up all the profit if the stock price goes down passed that mark. I then set up a price alert to be notified if the price goes up again past the sell price and re-evaluate my view on that particular stock.

I am also very satisfied with this week’s recovery in my $WFC position, with a 26% jump in just 4 trading days.

So now I am 49% in cash on my eToro portfolio and continue to look for more investment opportunities. One from my watchlist I am prepared to jump into is $BABA , but that will depend on how next week goes.

Enjoy the long weekend and for those who celebrate it, have a happy Easter !