Charter Communications. Potential 56 bagger.

In a world of multi-trillion dollar unprofitable space internet companies there is another internet company worth only 1% of space X. While Elon simps are cheering about the overpriced Cursor purchase and daydreaming about asteroid mining labor camps, there is another broadband provider quietly earning more money than Starlink has ever earned and generating cash faster than Musk can burn it. Charter Communications (CHTR). You know them as Spectrum internet, the 2nd largest internet provider in the United States, providing high-speed internet to 100 million Americans daily. Currently Charter is valued at around $125 down from $400 earlier this year. That gives them a market cap of $15-16 billion dollars and a Price to earnings of around 3. The free cash flow story is even more telling. Currently Charter is generating around $5 billion in FCF even as they are spending crazy capex to upgrade their entire network to symmetrical multi-gigabit – speeds Elon can only dream about. Management expects FCF to surge to around $8 billion in 2028 as they reduce their capex to a normalized $7-8 billion. While it’s true that they have been losing internet and video subscribers at a paltry rate of 1-2% a year, they are rapidly increasing their mobile subscribers – the end result being growth in total product lines sold and steady revenue and profits.   Given their FCF, the company has been buying back stock aggressively. In Q1 they bought back $1 billion worth of shares at an average price of $220 a share. At current prices the company will likely be buying back 8 million shares per quarter or 32 million share a year. The play: 1. Buy 1 share of Charter for $126. Never sell. 2. The company continues to buy back 32 million shares a year. 3. In 4 years the company buys back all their 120 million shares – except the one that you hold. 4. You are the sole owner of Charter Communications – if Elon tweets something you don’t like – just shut off his internet. Let’s see him try to connect to the World Wide Web without broadband service. Now, unfortunately, this strategy won’t work out exactly as planned because the finance bros will be forced to bid up the stock price as the earnings per share rises. But if the company continues to have a P/E of 3 or less, the company can continue its 25% buyback – while still paying down $1 billion debt a year. A 25% buyback = a 33% rise in Earnings per Share = a 33% in stock appreciation. Run the numbers for 10 years and you have a 16 bagger stock. If the company uses all its free cash flow to buy back stock = 33% buy back = 50% EPS increase = 56 bagger in 10 years. TLDR: Charter Communications is a medium risk – high reward stock opportunity.