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Dodge & Cox: Strong Signals Out of Cable Companies

Dodge & Cox's Charles Pohl says competition is working out to the advantage of the cable companies and valuations look attractive.

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Dan Culloton: You guys also have a very large weighting in media stocks, which, like technology stocks, are subject to very fierce competition, technological upgrades that could be really disruptive to their business models. What gives you the confidence in the media, and particularly the cable companies that you own, that they can continue to earn reasonable profits and cash flows over your time horizon?

Charles Pohl: We've spent a lot of time with the cable companies, looking at potential competitive threats. And originally each of these, in most markets, the cable companies had a monopoly position. One potential threat is satellite. Now we're invested in both DISH and DirecTV. So we have a pretty good understanding of what those guys are trying to do and what they're capable of doing, relative to the cable companies.

Dan Culloton has a position in the following securities mentioned above: DODFX. Find out about Morningstar’s editorial policies.