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Weitz Investment Management Comments on ADT Corporation

May 06, 2014 | About:

Finally, ADT Corporation's stock declined as we built our initial position over the past few months. Portfolio activity was moderate during the quarter. We bought shares of ADT, the leading provider of monitored home security service in North America. ADT's stock declined after the company reported gross customer additions that were below expectations. The quarterly results exacerbated fears about ADT's competitive position against new cable and telecom entrants. While competitive pressures have increased, we note that the company has taken steps to dampen sales of less profitable accounts. In our view, the company is wisely trading short-term sales results for more durable future profits. Results may be choppy during 2014, but we are more optimistic about 2015 and beyond.

From Wallace Weitz (Trades, Portfolio)'s first quarter 2014 report.


Rating: 3.0/5 (1 vote)

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Comments

whiteandbluepinstripes
Whiteandbluepinstripes - 7 months ago

I have to say, I was not impressed, but at least not dissatisfied, wtih the most recent quarterly results from ADT. I still have grave concerns regarding customer retention, satisfaction, pending lawsuits, corporate structure costs, and a myriad of other items. I have no reason to believe that they have all been 'fixed'. And once again, another acquisition was announced right at the time of a major quarterly results summary... this seems indicative of a company that cannot grow subscriber base with out acquiring companies. Having said all that, if I owned the stock right now, I'd probably hold onto it.

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