• Identification of the industry to which the company belongs.
Comcast Corporation is the largest cable operator, home Internet service provider, and fourth largest home telephone service provider in the United States. It belongs to the Telecommunication industry and more specifically CATV (Cable TV) Systems.
• Products and services of the Company.
Comcast Corporation operates in two segments: Cable and Programming.
The Cable segment manages and operates cable systems in the United States. It offers a variety of services over its cable systems, including video, high-speed Internet and phone services. It markets its cable services individually and in packages to both residential and business customers. Its video service offerings range from a limited analog service to a full digital service, as well as advanced services, which consist of high-definition television (HDTV) and/or digital video recorders (DVR). During the year ended December 31, 2010, the Cable segment generated approximately 94% of its consolidated revenue. The Cable segment also includes the operations of its regional sports and news networks.
The Programming segment consists of its consolidated national cable programming networks, E, Golf Channel, VERSUS, G4 and Style. Its revenue from its programming networks is primarily generated from monthly per subscriber license fees paid by multichannel video providers that have entered into multi-year contracts to distribute its programming networks, the sale of advertising and the licensing of its programming internationally.
The Company’s other business interests include Comcast Interactive Media and Comcast Spectacor. Comcast Interactive Media develops and operates its Internet businesses focused on entertainment, information and communication, including Comcast.net, Xfinity TV, Plaxo, DailyCandy and Fandango.
• Company’s financial position (strengths and weaknesses) within the industry.
Comcast Corp. became a media power house armed with a unique control over both content and distribution after completing the acquisition of a controlling stake in NBC Universal. Comcast now serves one-fourth of the U.S.’s pay-TV households supported by a large content-creation empire.
NBC Universal is U.S.’s fourth largest media company, enriched with vast content library. This will facilitate Comcast to expand its own video-on-demand opportunities.
Its merger with NBC Universal will not only give Comcast a competitive edge over its pay-TV rivals but also place the company head-on with media giants like Walt Disney Co. (DIS) and News Corp. (NWSA) Comcast, which is known for highly efficient management tactics, may now significantly develop NBC Universal’s sports and movie theaters that collect hefty fees from cable operators.
Comcast reported strong financial results for the second quarter of 2011.This performance was the combined effect of higher broadband subscribers’ addition and increased contribution from NBC Universal. In the second quarter of 2011, revenue and operating cash flow increased 50.5% and 28.5%, respectively, over the prior-year quarter. Free cash flow, a key growth metric for the cable TV industry due to its highly leveraged nature, grew 12.2% year over year.

• Obtain one analyst’s report on your company. Comment on the analyst’s recommendation.
Citadel Securities downgrades Comcast Corp (NASDAQ: CMCSA) from Edge Positive to Add. PT maintained at $27. Citadel analyst said, "We remain positive on the long-term story – Comcast’s cable business and NBCU were healthy businesses on an independent basis; under Comcast’s focused leadership, we believe the two together have the potential to create significant incremental shareholder value. However, after the recent run-up in the shares, we think Comcast’s stock price performance will be closely tied to how successfully it assimilates NBCU, finalizes the NBCU management team and strategy, and is able to begin delivering on the investments that are required to turn around the Broadcast Networks business. NBCU was recently awarded the rights to broadcast the Olympic Games through 2020 at a $4.4 billion price tag. However, for the 2008 and 2010 Olympic Games, NBCU reported losses (including $223 million for the 2010 Games), and is projected to lose money on the upcoming 2012 London Games as well. Although the company likely will leverage its broadcast, cable, and digital assets to maximize revenues from the Games, the first test of the strategy will be the 2012 Games."
According to me, the analyst’s recommendation makes sense. The company’s future is riding on the merger of NBC Universal and Comcast.

• Analyze the financial ratios for the last three years. What trends do you see? 2008 2009 2010
Avg P/E 22 11.9 14.3
Price/ Sales 1.45 1.45 1.63
Price/ Book 1.2 1.12 1.38
Net Profit Margin (%) 7.4 10.2 9.6
Book Value/ Share $14.04 $15.06 $15.97
Debt/ Equity 0.8 0.68 0.71
Return on Equity (%) 6.3 8.5 8.2
Return on Assets (%) 2.3 3.2 3.1
Interest Coverage 2.7 3.1 3.7

The current P/E ratio is less compared to the one in 2008, which is not a good thing. Investors are investors are not expecting higher earnings growth in the future. The Net Profit Margin is decent but less compared to 2009. This means that has costs that have increased at a greater rate than sales. Even though Debt/ Equity is high, Return on Equity and Return on Assets on not that good.
• Would you lend the company money? Would you purchase the company’s stock?
As stated above, Comcast has been making bold moves like merger with NBC Universal in order to dominate the cable and Internet-access industry. The problem is that these bold moves haven't really paid off yet. If you look at the above ratios, Comcast earns just around 3% return on its assets (ROA) and around 8% on return on equity (ROE). But, if you look at their total debt which is around $38 billion, the expected ROE should be double as is now.

The weak returns help explain why shares of Comcast have actually coming down in the past few years. The growth strategy adapted by the management hasn't worked as had hoped.
So I would not lend company the money and also, I will not purchase its stock. However in the long run, if the merger with NBC Universal starts generating good profits, I will change my opinion and buy the stocks and also invest in Comcast.