We recently published a list of 12 Best Affordable Stocks To Buy Right Now. In this article, we are going to take a look at where Charter Communications, Inc. (NASDAQ:CHTR) stands against other best affordable stocks to buy.
There has been a growing debate regarding whether the economy of the United States will have a soft landing. A recent report by Vanguard titled “Beyond Landing” released on November 25 discusses the economic outlook for the year ahead. The report highlighted that global inflation has significantly decreased over the past two years, nearing the target of 2%. However, this decline has been inconsistent across different regions, with many developed markets experiencing slowdowns due to monetary policy adjustments. The United States stands out as an exception, showcasing robust economic growth and full employment despite restrictive monetary policies.
The report raised critical questions about whether the US has achieved a “soft landing” or if high interest rates will eventually lead to a “hard landing.” The narrative has largely focused on the Federal Reserve’s ability to time rate cuts effectively to facilitate painless disinflation. Vanguard suggests that the strong growth and falling inflation in the US may be better explained by supply-side dynamics, such as increased labor productivity and a surge in available labor, rather than solely by Federal Reserve policies.
Regarding the 2025 outlook, the firm anticipates that US real GDP growth may decline from around 3% to closer to 2%, influenced by potential policy risks like trade tariffs and stricter immigration regulations. Core inflation is expected to remain above 2.5% for most of 2025. The firm also predicts that interest rates will stabilize at levels higher than those seen during the 2010s, fostering better returns in cash and fixed-income markets over the next decade. However, they express caution regarding equity markets due to elevated valuations. The report highlights a tension between momentum and valuation in risk assets, suggesting that while some stocks may continue to perform well, their high valuations could pose risks if economic conditions change unexpectedly.
A line of cable boxes and modern televisions, representing the company’s video services.
To compile the list of the 12 best affordable stocks to buy right now, we used the Finviz stock screener, Yahoo Finance, and Seeking Alpha. Using the screener we shortlisted stocks trading below a Forward P/E of 15, as of December 4, and that are expected to experience earnings growth this year. Next, we sorted our initial list by market capitalization and cross-checked the Forward P/E of each stock from Seeking Alpha and earnings growth from Yahoo Finance. Lastly, we ranked the stocks in ascending order of the number of hedge fund holders as per Insider Monkey’s database for Q3 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).
Forward P/E Ratio: 11.72
Earnings Growth This Year: 12.98%
Number of Hedge Fund Holders: 61
Charter Communications, Inc. (NASDAQ:CHTR) is a major telecommunications company in the United States that provides a variety of communication services, primarily under its Spectrum brand. These services include high-speed internet, television cable services, mobile services, and voice services for both commercial and residential usage.
While the company serves more than 37.1 million customers in 41 states around the United States, it has been facing difficulty in retaining cable TV customers. During the fiscal third quarter of 2024, the company lost around 9.5% of its video customers as compared to the year before. Two major factors have been affecting its customer base; the first being the general trend towards rising streaming services leading customers to let go of their wired cable providers. Secondly, the ending of FCC’s Affordable Connectivity Program (ACP) in the second quarter resulted in around 110,000 customers leaving the company.
Charter Communications, Inc. (NASDAQ:CHTR) has been working towards fighting this challenge. It announced to provide its TV Select Video customers with streaming subscriptions of up to $80 per month along with the launch of a “seamless entertainment” program, which will include Disney+, Peacock, Max, ESPN+, Paramount+, BET+, ViX, AMC+, Discovery+, and Tennis Channel Plus.
During the third quarter, Charter Communications, Inc. (NASDAQ:CHTR) increased its revenue by 1.6% year-over-year, driven by an addition of 545,000 total mobile lines. It is also working with the local and state governments to bring Spectrum Internet to underserved communities and activated around 114,000 subsidized rural passes during the quarter. It is one of the 12 best affordable stocks to buy right now.
Weitz Large Cap Equity Fund stated the following regarding Charter Communications, Inc. (NASDAQ:CHTR) in its Q3 2024 investor letter:
“We trimmed the Fund’s positions in Meta Platforms, S&P Global, and Charter Communications, Inc. (NASDAQ:CHTR) after significant runs in the stocks. Charter posted better-than-feared quarterly results, and the stock rebounded sharply from what we viewed as deeply oversold levels. A good start, but they still have much work to do. As always, our goal with trims is to re-calibrate position sizes to better reflect the Fund’s current opportunity set.”
Overall, CHTR ranks 12th on our list of best affordable stocks to buy right now. While we acknowledge the potential of CHTR to grow, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than CHTR but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
