Comcast Corporation (CMCSA): Leading the Digital Age with Robust Growth - InvestingChannel

Comcast Corporation (CMCSA): Leading the Digital Age with Robust Growth

We recently published a list of 7 Best Low Cost Stocks To Buy Under $50. In this article, we are going to take a look at where Comcast Corporation (NASDAQ:CMCSA) stands against other best low cost stocks to buy under $50.

Where are the Best Opportunities in the Bull Market Right Now?

A lot has happened in the stock market during the last couple of weeks. The Fed cut rates by 50 basis points to help the weakening labor market. A few days ago we saw the Chinese stimulus being announced which included a series of positive measures by the government to ease the economic pressure.

We recently covered the Chinese stimulus and its expected impact on the global economy in 7 Cheap Internet Stocks To Invest In Now. Here’s an excerpt from the article:

“Recently, China’s stock market has seen a sharp rally, driven by some aggressive measures by the government to revive the economy. China is the world’s second-largest economy and one of the key players in the technology industry. This huge economy has faced a series of challenges for the past few years in the shape of a sharp property market downturn and a lack of consumer confidence.

The government measures include interest rate cuts and liquidity injection into the market. On September 24, Reuters reported China’s central bank cut bank reserve requirement by 50 basis points and it also reduced interest rate by 20 basis points to 1.5%. Moreover, the bank also plans to issue 2 trillion yuan in special sovereign bonds.

These measures resulted in the CSI 300 index trading higher. The index closed 4.5% higher after the announcement whereas the Hong Kong Index gained 3.6%. This move by the Chinese central bank is said to have a positive effect around the globe. Analysts in the United States are already discussing the news as “China Boost”. While many analysts are calling this boost to be short-lived, others are confident that this is a positive mood and will benefit the market in the long term.”

The Fed rate cut and the Chinese stimulus are expected to affect the market positively. Adam Parker, Trivariate Research founder and CEO; Lauren Goodwin, New York Life Investments chief market strategist; and Kristina Hooper, Invesco chief global market strategist joined CNBC recently to talk about the best opportunities in the current bull market.

Adam Parker expressed that the market is outpacing the Federal Reserve’s action. He highlighted a sense of optimism surrounding AI deployment over the next few years, but he also raised concerns about market valuations exceeding economic realities. Parker likes the healthcare sector as it is driven by AI and believes that this will put the industry in a leading market position. He also believes that the Chinese Stimulus is a positive sign for the energy and industrial sectors.

On the other hand, Lauren Goodwin talked about how the rate cuts are supposed to affect the market. She thinks growth is the key indicator while analyzing the market. When the Fed is cutting rates, profit, and earnings margins typically stay where they are until growth starts to slow down. Moreover, she also pointed out that it is difficult to see the real economic catalyst that gives growth an upstart, without inflation. She also thinks that the upcoming period is going to be volatile between growth kicking up and then slowing down. Goodwin mentioned that she is going to be the buyer of the rally until unemployment starts rising and growth becomes a problem.

Lastly, Kristina Hooper mentioned the recent Fed cut to be a crisis cut in a non-crisis environment. She emphasized the Fed is cutting into growth, however, we will see a brief slowdown. The Fed has not only cut the rate by 50 basis points but is expected to cut by another 50 during the year and significantly more next year. These rate cuts are similar to throwing jet fuel in the market but that does not mean the stock market will go crazy. Hooper thinks that the fuel will help industries that have not rallied much recently benefit from the accelerating economy. She mentioned cyclicals to be one of the industries which are expected to enjoy the growth rally and also pointed out that the recent China stimulus will only help the cause.

Our Methodology

We compiled the 7 best low cost stocks under $50 using the Finviz stock screener. Using the screener we first aggregated the list of stocks that were trading below the Forward Price-to-Earning ratio of 23.98 (the market’s forward P/E as per the Wall Street Journal) and a share price of under $50. We also took into account the EPS growth rate. Then we ranked the list by the number of hedge funds to get the best stocks. Please note that the list is ranked in ascending order of the number of hedge fund holders in Q2 2024.

Why do we care about what hedge funds do? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).

Comcast Corporation (CMCSA): Leading the Digital Age with Robust Growth A couple watching their favorite show on TV, enjoying the entertainment network service.

Comcast Corporation (NASDAQ:CMCSA)

Share Price: $41.64

Forward P/E Ratio: 9.78 

Earnings Growth This Year: 5.50%  

Number of Hedge Fund Holders: 61

Comcast Corporation (NASDAQ:CMCSA) is one of the largest media and internet providers in the United States. It operates its media and content creation wings through renowned brands such as Telemundo, Universal Pictures, and NBC. It also operates various entertainment theme parks within the country.

The traditional media distribution channels are fading away internationally, Comcast Corporation (NASDAQ:CMCSA) has come out strong with its internet services segment to keep its profitability and revenue generation engines running. It has around 32 million broadband customers, which places it as a market leader in the United States.

The connections continued to grow during the second quarter of 2024, its wireless lines reached a 12% penetration rate adding around 322,000 new connections. The company also enjoys a healthy average revenue per user of 3.6% and has been able to maintain a historic average of 3% to 4%, indicating its operational robustness.

Lastly, although the overall revenue of the company came in with a decline of 2.7% year-over-year during the latest quarter, the earnings per share were above analyst expectations by around 9%.

Comcast Corporation (NASDAQ:CMCSA) is one of the best low-cost stocks to buy under $50. It was trading at $41.64 at the time of this writing. Moreover, the stock has a forward price-to-earnings ratio of only 10, making it undervalued at current levels.

ClearBridge Large Cap Value Strategy made the following comment about Comcast Corporation (NASDAQ:CMCSA) in its Q3 2023 investor letter:

“Long-term holdings Charter and Comcast Corporation (NASDAQ:CMCSA) delivered strong second-quarter results relative to expectations; their stable recurring revenue streams and undemanding valuations were rewarded in the current environment. Cable multiples compressed over the past 24 months on fears of heightened competition in their core broadband business from fixed wireless and fiber providers. While fiber remains a competitive alternative to cable broadband over the long term, high upfront investments and a materially higher cost of capital are resulting in slower buildouts than previously expected. Fixed wireless also continues to gain traction, particularly in rural markets, but share gains also appear to be moderating. At the same time, both Comcast and Charter are expanding their footprints into rural and adjacent markets while gaining wireless market share, leveraging their mobile virtual network operator agreements with Verizon. We think both cable companies are well-positioned to continue to grow while generating substantial free cash flows. We added to Comcast during the quarter.”

Overall, CMCSA ranks 5th on our list of 7 Best Low Cost Stocks To Buy Under $50. While we acknowledge the potential of CMCSA to grow, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for a promising AI stock that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

READ NEXT: $30 Trillion Opportunity: 15 Best Humanoid Robot Stocks to Buy According to Morgan Stanley and Jim Cramer Says NVIDIA ‘Has Become A Wasteland’.

Disclosure: None. This article is originally published at Insider Monkey.

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