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Buffett, Soros Increase Their Comcast, Time Warner Cable Stakes

Feb. 15 (Bloomberg) -- Billionaire investors Warren Buffett and George Soros increased their holdings of U.S. cable television companies, taking advantage of declines in stock prices to buy shares of the industry's top two operators.

Buffett's Berkshire Hathaway Inc. doubled its stake in Comcast Corp., the world's largest cable-television operator, to 10 million shares in the fourth quarter, the investment holding company said in a filing yesterday with the U.S. Securities and Exchange Commission. The stake was valued at $328.4 million as of Dec. 31, the filing said.

Soros Fund Management LLC purchased 2.6 million shares of Time Warner Inc., operator of the No. 2 U.S. cable business, according to a filing with the SEC. Those shares were valued at $50.5 million as of Dec. 31, according to the filing. New York- based Soros Fund Management reported no holdings of Time Warner during the third quarter.

``It certainly gives the appearance of smart money moving into the cable group,'' said Laura Martin, an analyst with Soleil Securities in Pasadena, California, who doesn't own shares of either company.

Buffett and Soros, who both turn 75 in August, were ranked second and 24th, respectively, on Forbes magazine's 2004 list of the richest Americans. The two investors bought their shares after Philadelphia-based Comcast and Time Warner, based in New York, fell to their lowest prices for 2004 in August.

Michael Vachon, a spokesman for Soros, didn't immediately return a phone message left after business hours at his office. Marc Hamburg, chief financial officer of Berkshire Hathaway, declined to comment.

August Lows

Cable shares fell amid heightened competition from satellite- TV companies. The cable industry isn't gaining subscribers as quickly as companies such as DirecTV Group Inc. and EchoStar Communications Corp.

``The whole cable sector has been pretty well beat up,'' said Ron Rizzuto, a professor of finance at the University of Denver. ``Now people are starting to see the long-term value of the stock.''

Comcast Class A shares reached a 2004 low of $26.25 on Aug. 16. The stock closed at $31.31 yesterday, down 22 cents in Nasdaq Stock Market composite trading. Time Warner fell to $15.41 on Aug. 12, its lowest price last year. The stock fell 15 cents to $17.85 yesterday.

The shares have risen since August as Comcast and Time Warner Cable boosted profit by convincing customers to switch to higher-priced digital television packages that offer features including video-on-demand and digital video recorders.

Time Warner Cable's operating profit rose 11 percent to $887 million as revenue increased 10 percent to $2.2 billion in the fourth quarter, the company said Feb. 4. The company had 10.9 million basic subscribers at the end of December, about unchanged from the end of 2003.

Buffett

Comcast increased profit 10 percent to $423 million last quarter by selling more fast Internet access.

Comcast spokesman Tim Fitzpatrick declined to give immediate comment. Time Warner spokeswoman Mia Carbonell didn't immediately return a phone call to her office and an e-mail placed after business hours.

For the 12 months ended in June, the satellite companies boosted subscriber counts by 14 percent while cable companies' numbers were little changed.

Buffett purchased Berkshire's first 5 million shares of Comcast on April 30, two days after the cable company dropped a $54.1 billion bid for Walt Disney Co.

Berkshire, based in Omaha, Nebraska, yesterday also disclosed it no longer had a stake in HCA Inc., the largest U.S. hospital chain, after reporting 13.5 million shares in its third- quarter filing.

Soros

Berkshire acquired 375,500 shares of Dean Foods Inc., the biggest U.S. milk processor, and increased its holding in retailer Gap Inc. The company reduced its stakes in sporting goods maker Nike Inc. and Iron Mountain Inc., the largest seller of records-management services.

Yesterday, Soros Fund Management said the firm sold its stakes in Anheuser-Busch Cos. and Baxter International Inc. and bought shares of Altria Group Inc., Applied Micro Circuits Corp., Cisco Systems Inc. and DuPont Co., according to the company's filing.