Charter Communications – Hidden Gem with Up To 85% Upside Opport

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Fundamental Indicators:

• Sector – Communication Services
  
• US Business Cycle Stage – late cycle, when this sector is neutral
  
• Revenue – consistently growing for the past 5 years, with 13% average annual rate
  
• Profits – even more explosive growth, with 26% average annual rate
  
• Net margin – decent 12% which has considerably increased since 2018
  
• P/E – quite low with 13.6 ratio compared to S&P500 with 21 and Communication Services sector with 17.5
  
• Liabilities - debt ratio is at 0.91 which is a little over the norm, Net Debt/ EBITDA is at 4.54 – no major problems with debt
  
• Conclusion – great performance across all indicators apart from the debt ratio, which shouldn’t be a concern at this stage – stock likely to continue growing
  

Technical Analysis (Elliott Waves):

• Main scenario of this idea suggests that we are still observing development of the global growth cycle which is currently at the stage of completing wave 5 of 5 (see higher timeframe graph)
  
• The key elements of this scenario are Contracting Tringle of wave 4 that lasted between 2017 and 2019 which reflects accumulation phase, and the final fifth which is taking a complex shape
  
• This final fifth wave is clearly shaping up by a choppy movement which indicates formation of an Ending Diagonal (see guidelines for Ending Diagonals below)
  
• Waves 1 to 4 have already formed and wave 5 is just about to start
  
• This may present a good long term opportunity with a target of $825 – up to 85% upside
  

This is a higher timeframe to reflect the full history of Charter Communications and to provide full wave count:

This is the link to the guidelines for Ending Diagonals

What do you think about Charter Communications and its short term prospects?
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