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OZ Management Initiates Stake in Comcast

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OZ Management’s holdings in Comcast

OZ Management initiated a new position in Comcast Corporation (CMCSA) in 4Q14 by purchasing 8,063,097 Comcast shares, representing 1.26% of the fund’s 4Q14 portfolio.

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Comcast-TWC merger approval delayed

In March 2015, the FCC (Federal Communications Commission) again paused its informal 180-day “shot-clock” deadline on the review of the proposed merger of Comcast Corporation and Time Warner Cable (TWC). The delay was over the issue of confidential programming agreements. Another deal that is still awaiting FCC approval is AT&T’s (T) acquisition of DIRECTV (DTV).

The FCC must determine whether these deals are in the public interest. It’s also weighing how to resolve a hitch in collecting and reviewing confidential agreements that pay-TV companies signed with media companies such as CBS Corporation (CBS) and 21st Century Fox (FOX) to offer their content to subscribers.

Regardless, Comcast is confident that the merger will be approved and hopes it will close in early 2015. The company believes the merger will ultimately benefit customers, particularly those in Time Warner Cable markets.

You can gain exposure to media companies by investing in the Consumer Discretionary Select Sector SPDR Fund (XLY). Comcast also has a 1.25% exposure to the iShares Russell 1000 Growth ETF (IWF).

Robust 4Q14 Cable Communications results

Comcast noted that its consolidated revenue for the fourth quarter of 2014 grew 4.8% to $17.7 billion. Its EPS (earnings per share) for 4Q14 was $0.74, a 2.8% increase from the $0.72 reported in 4Q13. While the results beat revenue, its earnings missed street consensus.

Cable Communications revenue was up 6.1% to $11.3 billion, reflecting growth of 9.9% in high-speed Internet and 20.8% in Business Services. NBCUniversal’s revenue increased 2.3% to $6.6 billion as the growth in Theme Parks and Broadcast Television was partially offset by lower Filmed Entertainment revenue.

Comcast raised its share buyback authorization to $10.0 billion. It also increased its dividend by 11.1% to $1.00 per share on an annualized basis.

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About Comcast

Comcast Corporation is a global media and technology company with two primary businesses: Comcast Cable and NBCUniversal. Comcast Cable is the nation’s largest video, high-speed Internet, and phone provider to residential customers under the XFINITY brand. The company also provides these services to businesses. For 2014, the company’s Cable Communications segment generated 64% of its consolidated revenue.

The NBCUniversal business encompasses Comcast’s Cable Networks, Broadcast Television, Filmed Entertainment, and Theme Parks segments. NBCUniversal operates 30 news, entertainment, and sports cable networks, the NBC and Telemundo broadcast networks, and television production operations. It also operates television station groups, Universal Pictures, and Universal Parks and Resorts.

In the next part of this series, we’ll cover OZ Management’s new position in Yahoo! Inc. (YHOO).

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