Analyst: Philip Cusick, JPMorgan
Sector: Telecom services, cable, and satellite
Top Buy: Time Warner Cable (TWC), allowing consumers to tap into the "tremendous" consumer demand for bandwidth. T-Mobile (TMUS), which, according to Cusick, is "the best of the wireless players and should see continued growth as it takes share as the best value offer in the market." Lastly, Cusick named Level 3 (LVLT).
Top Sell: No comment.
The most important theme of the industry: The movement from video to the web, especially the on-demand nature of the web. One of the most important issues to watch is cord-cutting — i.e., consumers dropping their cable in favor of Hulu, YouTube, and Netflix.
What we're watching and some are missing: While the rate of cord-cutting has been slow, cord-shaving, where customers decide to downgrade their TV packages for fewer channels, "seems to be accelerating, and we believe will change the relationships among consumers, carriers, and media companies in the next few years."