The Alpha Algorithm Identifies a Cable Play

This week’s Alpha Algorithm selection is a familiar name in the world of cable TV and Internet: Charter Communications Inc. (CHTR).

Founded in 1999 and headquartered in Stamford, Connecticut, Charter Communications Inc. (CHTR) is a leading broadband communications company and the fourth-largest cable operator in the United States. Charter provides a full range of advanced broadband services, including advanced Charter Spectrum TV video entertainment programming, Charter Spectrum Internet access and Charter Spectrum Voice.

Charter Communications Inc. (CHTR) versus the S&P 500 over the past six months.

Eight Top Investment Strategies Betting on Charter Communications Inc. (CHTR).

1. Momentum Factor

The stock is one of the top 120 large- and mid-cap U.S. stocks exhibiting relatively higher price momentum, as measured by a specific factor which has historically driven a significant part of companies’ risk and return.

2. Large-Cap Momentum

The stock is part of a major hedge fund’s systematic strategy that invests in large- and mid-cap U.S. companies with positive momentum and that rank in the top third of total returns over the prior 12 months, excluding the last month.

3. Pure Growth

The company is part of a strategy that selects companies from the S&P 500 Index, based on three growth factors: current internal growth rate, historical earnings per share (EPS) growth and historical sales/share growth.

4. Insider Sentiment

It is one of 100 equally weighted U.S.-listed large- and mid-cap stocks chosen based on trading in company stock by corporate insiders, price momentum and trailing 12-month volatility. Specifically, it looks at the increase in insider holdings.

5. Large-Cap Alpha Growth

The company has been chosen as part of an alpha-seeking index that selects and weights growth stocks from the S&P 500 Growth Index. The proprietary methodology uses price appreciation — among more traditional factors — and weights the constituents based on their respective growth scores.

6.Broker’s Best

It is one of Raymond James’ selection of stocks that is expected to outperform the S&P 500 over either a six- or 12-month period.

7. Hedge Fund Alpha

Based on publicly available disclosures, successful hedge fund managers are investing in the stock.

8. Hedge Fund Gurus

The stock is one of the top U.S.-listed equity positions reported on Form 13F by select hedge funds with concentrated top holdings.

Recommendation

Buy Charter Communications Inc. (CHTR) at market today and place your stop at $274.00.

I’m holding off on an options recommendation on this one for now.

Portfolio Update

Click here to view the Portfolio Update.

*Last week’s recommendation of Apple, Inc. (AAPL) isn’t included in this chart, but it had a positive first week in your portfolio and currently trades at $120.

Sincerely,

Nicholas A. Vardy