We also initiated a holding in Charter Communications (NASDAQ:CHTR), the second-largest U.S. cable television and broadband company. Charter is a freshly consolidated, high-quality asset with significant integration potential, led by unusually strong management. Renowned cable executive John Malone sits on Charter’s board of directors, and in our many years of following his activities, we have found him to be one of the finest capital allocators in the media industry. We believe that the cable business has improved significantly as it has increasingly focused on internet connectivity, and investors are underappreciating this fact. Consumer demand for faster broadband seems to be nearly insatiable, and in many of its markets, Charter has the only fiber-rich network capable of meeting this demand. Competitor efforts to enter these markets have proven uneconomic because of the fractional penetration available to new entrants. Thus, barriers to entry are quite high, providing a long runway for growth for the incumbent cable operators. With an advantaged competitive position and strong management, Charter provides an attractive investment opportunity in our view.
From Bill Nygren (Trades, Portfolio)'s first quarter 2018 Oakmark Global Fund commentary.
