ATUS - Altice USA

[walkie518]

Altice USA spun from Altice NV a few days ago.

I get the feeling that Altice NV has had a strong focus on quarterly targets instead of longer-term returns, but I am not sure if this spread so deeply into Altice USA?

At the same time, I would think that ATUS' proforma figures should be pretty good since it's a geographic split. 

I see 737m shares at $17.71/sh or $13.05B Mcap and roughly 6.5x cash from ops

Given the leverage, I suppose the valuation makes sense despite the selling pressure from the spin?  Is there something I'm missing?  How is this deal so efficient while Charter is so cheap? 

[wisowis]

Attracted the attention of Greenlight Capital.

The Partnerships made a new investment in Altice USA (ATUS) at an average price of $18.38.
ATUS trades at an EBITDA multiple discount to pure-play cable peers Charter Communications
and Cable One despite better free cash flow conversion and better new investment opportunities.
ATUS is rebuilding a majority of its network with fiber in the coming years, with an anticipated
40-50% return on its investment. The shares trade at a 10% cash flow yield, in part because of
market concerns over cord-cutting. But when a customer drops linear video and instead streams
video through their broadband connection, data consumption rises very dramatically, which is
positive for ATUS. ATUS shares ended the quarter at $18.14.

[maybe4less]

Attracted the attention of Greenlight Capital.

The Partnerships made a new investment in Altice USA (ATUS) at an average price of $18.38.
ATUS trades at an EBITDA multiple discount to pure-play cable peers Charter Communications
and Cable One despite better free cash flow conversion and better new investment opportunities.
ATUS is rebuilding a majority of its network with fiber in the coming years, with an anticipated
40-50% return on its investment. The shares trade at a 10% cash flow yield, in part because of
market concerns over cord-cutting. But when a customer drops linear video and instead streams
video through their broadband connection, data consumption rises very dramatically, which is
positive for ATUS. ATUS shares ended the quarter at $18.14.

Another long he'll lose money on.

[mateo999]

Attracted the attention of Greenlight Capital.

The Partnerships made a new investment in Altice USA (ATUS) at an average price of $18.38.
ATUS trades at an EBITDA multiple discount to pure-play cable peers Charter Communications
and Cable One despite better free cash flow conversion and better new investment opportunities.
ATUS is rebuilding a majority of its network with fiber in the coming years, with an anticipated
40-50% return on its investment. The shares trade at a 10% cash flow yield, in part because of
market concerns over cord-cutting. But when a customer drops linear video and instead streams
video through their broadband connection, data consumption rises very dramatically, which is
positive for ATUS. ATUS shares ended the quarter at $18.14.

Another long he'll lose money on.

Why do you say that?

[maybe4less]

Attracted the attention of Greenlight Capital.

The Partnerships made a new investment in Altice USA (ATUS) at an average price of $18.38.
ATUS trades at an EBITDA multiple discount to pure-play cable peers Charter Communications
and Cable One despite better free cash flow conversion and better new investment opportunities.
ATUS is rebuilding a majority of its network with fiber in the coming years, with an anticipated
40-50% return on its investment. The shares trade at a 10% cash flow yield, in part because of
market concerns over cord-cutting. But when a customer drops linear video and instead streams
video through their broadband connection, data consumption rises very dramatically, which is
positive for ATUS. ATUS shares ended the quarter at $18.14.

Another long he'll lose money on.

Why do you say that?

Sorry, mostly just a joke.

[walkie518]

Attracted the attention of Greenlight Capital.

The Partnerships made a new investment in Altice USA (ATUS) at an average price of $18.38.
ATUS trades at an EBITDA multiple discount to pure-play cable peers Charter Communications
and Cable One despite better free cash flow conversion and better new investment opportunities.
ATUS is rebuilding a majority of its network with fiber in the coming years, with an anticipated
40-50% return on its investment. The shares trade at a 10% cash flow yield, in part because of
market concerns over cord-cutting. But when a customer drops linear video and instead streams
video through their broadband connection, data consumption rises very dramatically, which is
positive for ATUS. ATUS shares ended the quarter at $18.14.

Another long he'll lose money on.

Why do you say that?

Sorry, mostly just a joke.

Greenlight has made its share of mistakes, but ATUS likely isn't one of them.

Buying ATUS today might be like buying CHTR a year ago. 

That ATUS has an MVNO w/Sprint is fairly interesting. 

In some parts of the country, Sprint's coverage is worse than awful.

However, if you look at Altice USA's primary markets, Sprint has pretty good coverage.  My guess here is that Altice got a better deal than working with Verizon as Comcast and Charter have, but it likely doesn't give away anything as far as coverage is concerned? 

Anyone have a better feel or what's wrong with this map: https://coverage.sprint.com/

ATUS has a lot of firepower and no material maturities until 2025/6, at which point, ATUS will likely be a very different company. 

ATUS will be buying $5B of stock over the next 3 years ... in addition to the previous $1.5B plan?!

For a $22B mcap with 3% rev growth, continued margin expansion, and massive buyback, I can't tell you what next month will look like, but three years from now looks very good? 

[muscleman]

walkie518, thank you for your comments. Do you have any updates after their 2019 Q3? It doesn't look too bad to me but the stock  tanked quite a bit.

[walkie518]

walkie518, thank you for your comments. Do you have any updates after their 2019 Q3? It doesn't look too bad to me but the stock  tanked quite a bit.

If reading the tea-leaves correctly, the drop resulted from faster cord-cutting in Altice's footprint and lower guidance.

I'm indifferent to guidance but look to Charter as a reference.  The opportunity for Charter opened a little more than a year ago as they were launching their mobile business.  CHTR sank as the company dug its heels into this new strategy behind Comcast. 

Charter has not had video losses in the same way, but broadband, net-net, is a much better business than video ever was: Who pays for the content?

Altice is a content distribution business.  I believe the trends remain in ATUS' favor. 

Now, is it more likely a deal w/Charter could occur (stock for stock) at lower prices, sure, will it happen now, unlikely.  Would Charter prefer ATUS over the private Cox?  I couldn't say other than the higher valuations on might find in private markets today. 

At the end of the day, I don't think video losses mean broadband or SMB losses, and it's more likely to be a buying opportunity. 

Do I think online sales only of cell phones is a good idea?  Having a physical footprint might sell more phones, but if enough ppl know about it, the strategy might work.  This is speculative and I view the decline as somewhat speculative or fear-driven.