By Peet Serfontein & Khumbulani Kunene
We initiate a long position with a target price of $390 and a stop-loss of $320 (Risk/reward ratio 1:2.5).
Charter Communications is a leading US telecommunications and mass media company operating under the Spectrum brand. Spectrum is a broadband connectivity and cable operator serving more than 32 million customers in around 40 states. CHTR offers a range of residential and business services, including Spectrum Internet, TV, Mobile and Voice.
For small- and medium-sized companies, Spectrum Business delivers the same suite of broadband products and services coupled with special features and applications to enhance productivity, while for larger businesses and government entities, Spectrum Enterprise provides highly customised, fibre-based solutions.
Technically, a developing symmetrical triangle pattern presents a promising investment opportunity (see the black converging trendlines on the main chart). The pattern suggests a potential breakout is approaching. As the stock's highs and lows converge, volatility declines, highlighting that buyers and sellers are reaching a point of indecision before a significant move. Increasing volumes near the breakout zone solidifies the bullish stance.
A price in the Accumulation phase of the Wyckoff Price cycle acts as additional bullish support (see the insert). This phase indicates that smart money and institutional investors are entering positions at lower prices and comes after a downtrend.
Downside price momentum per the MACD indicator is a concern but recent sideways trajectory of the on-balance volume (OBV) indicator supports our bullish view.
| Share Information | |
|---|---|
| Share Code | CHTR |
| Industry | Media & Entertainment |
| Market Capital (USD) | 54.05 billion |
| One Year Total Return | 12.06% |
| Return Year-to-Date | -0.73% |
| Current Price (USD) | 3.40 |
| 52 Week High (USD) | 4.15 |
| 52 Week Low (USD) | 2.36 |
| Financial Year End | December |
| The stock has shown resilience in its price this year, presenting opportunity for strong growth in the short term. | |
| Consensus Expectations (Bloomberg) | ||||
|---|---|---|---|---|
| FY24 | FY25E | FY26E | FY27E | |
| Headline Earnings per Share (USD) | 34.97 | 37.14 | 43.40 | 50.68 |
| Growth (%) | 6.21 | 16.83 | 16.78 | |
| Dividend Per Share (USD) | 0.00 | 0.38 | 0.00 | - |
| Growth (%) | -100.00 | - | ||
| Forward PE (times) | 9.16 | 7.84 | 6.71 | |
| Forward Dividend Yield (%) | 0.11 | 0.00 | - | |
| Earnings is expected to reach double-digit growth in the medium term. | ||||
Buy/Sell Rationale:
Technical Analysis:
Fundamental view
| Share Name and Position | AMGN US - Buy (Continue to hold) |
MPWR US - Buy (Continue to hold) |
DOV US - Buy (Continue to hold) |
|---|---|---|---|
| Entry | 267.10 | 617.57 | 194.48 |
| Current | 289.02 | 656.29 | 202.92 |
| Movement | +8.2% | +6.3% | +4.3% |
|
A price in a steady upward trend remains of interest. Remains above its 200-week simple moving average. Fading downside price momentum is supportive.
Our profit target remains at $300.00 with a trailing stop-loss $274.60. Exit the trade by 26 March 2025. |
A gap in the price of the stock remains of interest. Remains sandwiched between its 200-week and 200-day simple moving averages. Fading downside price momentum supports the trade strategy.
Our profit target remains at $788.00 with a trailing stop-loss $590.00. Exit the trade by 2 April 2025. |
Some seasonal trends in the price remains of interest. Remains above its 200-day simple moving average. Fading downside price momentum is supportive.
Our profit target remains at $214.00 with a trailing stop-loss at $195.00. Exit the trade by 9 May 2025. |
| Share Name and Position | TDG US - Buy (Continue to hold) |
STE - Buy (Continue to hold) |
CMG - Buy (Continue to hold) |
|---|---|---|---|
| Entry | 1 292.86 | 217.20 | 58.99 |
| Current | 1 307.66 | 219.40 | 59.02 |
| Movement | +1.1% | +1.0% | +0.1% |
|
A smaller steep upward tilting inclining channel pattern remains of interest. Testing its 200-day simple moving average. Upside price momentum that halted is a concern.
Our profit target remains at $1 500.00 with a trailing stop-loss at $1 233.00. Exit the trade by 14 February 2025. |
An Elliott wave price action that is forming a trough remains of interest. Remains just below its 200-day simple moving average. The start of upside price momentum is supportive.
Our profit target remains at $239.00 with a trailing stop-loss $210.70. Exit the trade by 18 Aril 2025. |
A price using its 200-day simple moving average (SMA) as a base remains of interest. Fading downside price momentum is supportive.
Our profit target remains at $67.00 with a trailing stop-loss $56.00. Exit the trade by 23 May 2025. |
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