1-Star Stocks Poised to Plunge: Charter Communications?

Market-lagging returns could be written in this 1-Star.

Brian D. Pacampara, CFA
Brian D. Pacampara, CFA
Sep 4, 2012 at 12:00AM

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, cable TV provider Charter Communications (Nasdaq: CHTR) has received the dreaded one-star ranking.

With that in mind, let's take a closer look at Charter's business and see what CAPS investors are saying about the stock right now.

Charter facts

Headquarters (founded) St. Louis (1999)
Market Cap $7.8 billion
Industry Cable and satellite
Trailing-12-Month Revenue $7.4 billion
Management CEO Thomas Rutledge (since February 2012)
CFO Christopher Winfrey (since November 2011)
Return on Equity (average, past 3 years) 5%
Cash/Debt $5.0 million / $12.9 billion
Competitors Comcast
Cox Communications
Time Warner Cable

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 58% of the 12 members who have rated Charter believe the stock will underperform the S&P 500 going forward.

Just last week, one of those Fools, All-Star jwray01, succinctly summed up the Charter bear case for our community:

Consistently losing money, book value is ~0, and tangible book is around negative 8B. It's headed for yet another bankruptcy. Cable is obsolete and more and more people are cutting the cord, while the valuation of this stock is still in a bubble.

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Want to see how well (or not so well) the stocks in this series are performing? Follow the TrackPoisedTo CAPS account.