The bulls are coming out in force amid a strong fourth-quarter earnings report for Comcast (NASDAQ: CMCSA) that included notable subscriber gains.
Notable in that regard is hedge fund manager Anthony Bozza, founder of the $3 billion Lakewood Capital fund. He sent a letter to shareholders, downplaying cord-cutting concerns at the behest of SVOD services, and touting the MSO's broadband connectivity business.
"Investor concern is largely centered on the rise of streaming video providers like Netflix and the resulting risk of customers canceling their cable video service, commonly called 'cord-cutting,'" Bozza said. "Although roughly half of Comcast's cable revenue comes from video, we believe the potential impact to earnings from this issue is rather minor. Video is actually the lowest margin revenue source in the cable business due to the significant associated programming costs that are paid to third-party content providers in contrast to voice and data revenues that have virtually no variable costs. We estimate that video represents only around 20% of cable operating profit once all costs are allocated."
You can read more about Bozza's investor note in this Business Insider article.