Looked like a pretty positive article in Barron's, but the stock is down another 4% today last I looked. Soon, they'll have no (or very little) debt. Pretty difficult for me to believe they are in the same camp (re: upgrade costs) as the cable providers. But I am biased thanks in part to what I've read from Longleaf, Torray and Nygren.
Well, if you put it that way, I guess it does smell. A few things could change that: Revenues have been growing - even over the past few years - at double digit rates and are projected to continue to grow at nearly 10% per year over the next five years. Cash flow is expected to grow at nearly 32% per year over the next five years. Capital spending, however, is expected to decline at about a 3.75% rate over the same period, and their debt is expected to decline by over 590 mil (about 22%) as well. Operating margins are also expected to increase as well from around 4% now to around 23% in five years. Prices are becoming comparable to cable for a "higher quality" product. They are the market leader and gaining market share every year. Oh, and who is going to compete against them? And, as Longleaf has stated, the main difference between them and the cable companies is the cap ex.
The smell may be unpleasant right now, but it could very well end up smelling like roses IF (and an important if at that) the "expected" scenarios turn out into fact. Time will tell. But who ever said that investing was "easy"?