8 High Growth High Margin Stocks to Invest In Now

3. Liberty Broadband Corp. (NASDAQ:LBRDK)

5-Year Net Income CAGR: 132.96%

TTM Net Profit Margin: 81.86%

Number of Hedge Fund Holders: 55  

Liberty Broadband Corp. (NASDAQ:LBRDK) operates and owns interests in a broad range of communications businesses; primarily comprised of GCI Holdings, a wholly owned subsidiary, and an equity method investment in Charter Communications. Through its subsidiaries, it provides cable television services, high-speed internet, and other telecommunications services to residential and commercial customers. The focus is on investing in and managing cable assets.

The company made $246 million in the second quarter of 2024 while earning $1.36 per share. While both these values missed Street estimates, there was still 0.41% year-over-year revenue growth, driven by continued strength in data sales, particularly to the rural health care and school customers, partially offset by declines in wireless. The data segment contributed $60 million and the wireless segment contributed $47 million to the total revenue.

GCI, the subsidiary, invested $58 million in capital expenditures to improve its wireless and data networks in Alaska during Q2. This investment has contributed to a customer base of 158,000 for the data segment and 201,900 for the wireless segment. Liberty Broadband Corp. (NASDAQ:LBRDK) is focused on reducing debt and evaluating strategic alternatives for its TripAdvisor investment.

In late September, John Malone, a billionaire investor, proposed a merger between two companies he owns: Liberty Broadband and Charter Communications, to create a larger cable TV company in the US. Liberty Broadband’s stock price rose 25% after the proposal was announced.

The company has successfully reduced debt and improved its financial flexibility. While challenges remain, such as the impact of the Affordable Connectivity Program (ACP) on its subscriber base, the focus on cost management and operational efficiency positions it well for future success.

Weitz Investment Management Partners III Opportunity Fund stated the following regarding Liberty Broadband Corporation (NASDAQ:LBRDA) in its Q2 2024 investor letter:

Liberty Broadband Corporation (NASDAQ:LBRDA) (26% owner of Charter Communications) was the Fund’s top year-to-date detractor. Shares of Charter Communications remain in the penalty box as investors wait to see how the mid-May expiration of the federal Affordable Connectivity Program (ACP) impacts subscriber results. We anticipate Charter will retain many, if not most, of its five million ACP customers, but we acknowledge this uncertainty has created an added overhang on the stock price. Beyond this one-time event, we believe the long-term picture for Charter remains intact.