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Crawford Buys Gemstar, Sells Charter

2/23/2003 7:00 PM Eastern

Media investor Gordon Crawford continues to rejigger his vast cable portfolio, unloading millions of shares of poor performers like Charter Communications Inc., and cautiously increasing smaller positions in bargain stocks like Gemstar-TV Guide International Inc. over the last several months.

Crawford, the senior vice president of Capital Research Group, manages two influential media funds: Capital Research & Management and Capital Guardian Trust.

He's known for providing counsel to some of media's biggest players, including John Malone and Barry Diller, and he's had a hand in some of the industry's largest deals, including Time Warner Inc.'s purchase of Turner Broadcasting System Inc. in 1995.

Last year, he attracted attention by backing Citizens Communications Corp. chairman Leonard Tow's short-lived tenure on the Adelphia Communications Corp. board of directors.

The biggest change to his portfolio involved Charter. Capital Guardian dumped about 9.5 million shares between Sept. 30 and Dec. 31, reducing its holdings from 10.97 million shares to just 1.5 million shares.

Charter's stock price dropped nearly 93 percent in 2002, amid heavy subscriber losses and a federal grand jury investigation into some of its accounting practices.

But Crawford apparently saw opportunity in the declining shares of Gemstar-TV Guide. That stock dropped more than 88 percent in 2002 amid accounting scandals and management changes.

Crawford's funds bought 8.85 million shares of Gemstar between September and December, though.

Buying 'hated' issues

Gemstar was a relative bargain. The stock, trading as high as $28.04 per share on Jan. 2, 2002, fell to $3.25 per share on Dec. 31.

"They [Gemstar] are under everyone's radar screen," said one analyst who asked not to be named. "Historically, that's the way you make money, you buy things when they are the most hated."

In other instances, Crawford reduced his cable holdings in one fund while increasing them in another.

Take Cablevision Systems Corp. and Liberty Media Corp.

Crawford shaved about 325,000 Cablevision shares from Capital Research from September to December, and dropped 7.5 million shares of Liberty during the same time frame.

Capital Guardian raised its Cablevision holdings in the period from 24.8 million to 26.4 million and its Liberty stake from 28.5 million to 29 million.

Capital Guardian also substantially reduced its News Corp. stake from 2.18 million in September to 46,789 in December. At Capital Research, the News Corp. stake held fast at 21.1 million.

And despite AOL Time Warner Inc.'s tumultuous year — in which its stock price fell 59 percent — Crawford's Capital Research bolstered its AOL stake from 299.9 million shares in September to 305 million in December.

Capital Guardian added 1.6 million AOL shares from 27.9 million in September to 29.5 million in December.

Unlike previous periods, Crawford did not favor one sector — operators or programmers — over the other. Perhaps because both sectors are doing equally badly.

Crawford's Cable Portfolio
Company 12/31/02 9/30/02 Change
*In millions of shares.
Source: SEC filings
Gemstar TV Guide 8.9* 0 8.9
AOL Time Warner 334.5 327.8 6.7
News Corp. 21.1 23.3 -2.2
Motorola 42.7 40.85 1.85
Cablevision 26.02 24.8 1.22
Walt Disney Co. 6.7 6.4 0.3
Liberty Media 29 36 -7
Charter 1.5 10.96 -9.46

 

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