The Time Warner deal is a smokescreen for the fact that Comcast faces many problems to which it does not have an answer. The market already understands that CMCSA has overpaid, which is why the stock is down 5% since the acquisition was announced. And the price will drop further as the market catches on to the larger competitive issues that Comcast faces.
Last week, Facebook (FB) filed its second annual report as a publicly traded company, which allows us to initiate coverage. The company’s strong return on invested capital (ROIC) and profit growth offset the stock’s expensive valuation (~$70/share) to earn our Neutral rating.