Time Warner Cable: Pershing Square's Next Target?

Stephen Castellano submits: At first glance, it seems that Time Warner Cable Inc. (TWC) could be an interesting focus for activist investors like Pershing Square Capital Management LP. Just like Target Corp. (TGT), which Pershing found attractive back in the summer of 2007, Time Warner Cable shows very good relative value and a track record of recent operating momentum, but analyst revisions and key fundamental characteristics lag other companies in the Consumer Discretionary sector. No other company fits Target's 2007 profile at the moment. However, a closer look at TWC beyond the rankings shows that while working capital management could be improved a bit, it seems unlikely that anything simple could be done to change its trend of high capital spending and low returns on capital, which reflects the very nature of the capital-intensive telecom services and cable industries. Time Warner Cable deserves to be noticed, but it is simply not the Target we are looking for. Complete Story �

Source: Media Sector and Stocks Analysis from Seeking Alpha