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Thursday, July 13, 2006

Most Widely Traded 48 Hour Clock: Adelphia and TimeWarner Cable

Stocks: (TWX)

24/7 Wall St. has begun coverage of the 36 most widely traded stocks, eighteen each from the NYSE and the NASDAQ. Most of these stocks trade over 50 million shares a week. This new feature will highlight each of the 36 stocks at least every 48 hours giving investors fresh infomation and perspective on the companies whose shares are most likely to move the broader markets.

In the last quarter Time Warner's most successful business was its cable operations. Revenue in this units rose 15% to $2.58 billion. Operating income was up 25% to $501 million.

The market has recently been focused on the strategy of AOL to cut subcriptions in exchange for a larger audience and a bigger cut of the online ad market. However, even it this takes $1 billion off operating income over the next three years, as some analysts have predicted, the Adelphia purchase may more than make up for it.

The AOL move is still to big a risk. Operating income from the unit was $269 million in the first quarter, and it is questionable whether allowing paid subscriber free access to AOL products will drive more advertising revenue that what comes in to the Time Warner online unit today.

But, the real action in operating income over the next two to three years will come from cable and its will be enhanced by Adelphia.

Douglas A. McIntyre can be reached at He does not own securities in companies that he writes about.

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