Charter Should Produce Strong Cash Flow Even if Growth Isn't Stellar

We like Charter’s aggressive effort to drive customer penetration by limiting price increases, improving customer service, and expanding its offerings to appeal to a variety of preferences. We expect the firm will successfully navigate growing competition from the phone companies, though growth will likely slow in the coming years. Charter’s aggression extends to its capital structure, where heavy share repurchases have bolstered shareholder returns but have also kept debt leverage high, which will likely add volatility to the share price and could limit financial flexibility.