Staying connected in the digital age is critical, and Cox Enterprises has made it a mission to ensure those connections are possible. In fact, the company’s mission statement goes a step further, stating the company’s goal is to “Empower people today to build a better future for the next generation.”
Cox works to achieve that goal by identifying and investing in growth and diversification, developing and integrating new technology into its products, and keeping financial security in mind to ensure the company has the resources to continue on its mission for the long term.
To date, Cox Enterprises has been quite successful, both in offering the latest communications technology to consumers, as well as operating some of the most popular information resources available in the automotive industry. Better still, it is turning a profit along the way.
This success has attracted the interest of investors, but unfortunately, shares simply aren’t available for public trading. It is a private company so it’s not listed on public stock exchanges.
The good news is that Cox isn’t the only company to innovate in this industry, and there are a variety of alternative options for those who wish to add technology and communications to their portfolios.
Overview of Cox Enterprises
James Cox founded his namesake company in 1898. At the time, the sort of technology in use today was unimaginable. However, Cox knew that before long, inventors and innovators would develop a series of ever-more-sophisticated creations.
After all, between the time he was born and the year he turned 10, Thomas Edison invented the phonograph and the light bulb, and Alexander Graham Bell came out with the first telephone to be widely adopted by consumers.
It was in this world that Cox chose his first project, the most popular communications tool of the era: a newspaper. He was just 28 years old when he took ownership of the Dayton Evening News, which is still in print today as the Dayton Daily News.
While Cox did take a short break from the business world to test the political waters, he eventually settled into the hard work of building his company to the industry-leading powerhouse that it is today.
Four generations of the Cox family have made the company their life’s work, and it shows in the organization’s ongoing growth.
Cox Enterprises 101
Today, Cox Enterprises is divided into three divisions:
- Cox Communications
- Cox Automotive
- New Ventures
Under the Cox Communications heading, there are a variety of media and communications businesses that operate through the company’s proprietary IP network, which spans the entire United States.
Products include internet and telephone service, along with home security and home automation options. Cox Communications is currently the third largest cable company in the United States, with approximately six million total business and residential customers.
While the Cox Automotive division does not manufacture or sell vehicles directly, it is intimately involved in these processes through brands that include Autotrader, Dealer.com, and Kelley Blue Book. Buyers, dealers, and manufacturers rely on Cox Automotive services to guide decision-making in each step of the sales process.
The New Ventures division is deep into the exploration of tomorrow’s critical technologies. Right now, Cox Enterprises is developing a sweeping clean technology program. Specifically, the company plans to create a billion-dollar business in the areas of clean agriculture, clean water, and clean energy.
The New Ventures division also has an eye on opportunities to redesign health care in a way that prioritizes patient needs and patient experience. The plan is to leverage available technologies to create a patient-centric model that reduces pain points like obtaining needed testing and maneuvering the complexities of medical insurance.
Finally, New Ventures is also taking a hard look at Esports. In partnership with Province, Inc., Cox Enterprises launched Atlanta Esports Ventures, which runs a team in the Overwatch League. In addition, Cox has a team in the Call of Duty League.
Both leagues are popular around the world, attracting participants from North America, Asia, and Europe, and many forward-looking analysts believe Esports has potential for substantial growth in coming years.
All of the businesses under Cox Enterprises’ umbrella put their employees first. For example, Cox Communications has been awarded the title of Best Operator for Women by the Women in Cable Telecommunications organization for 10 years, and it is regularly recognized in Diversity Inc.’s list of Top 50 Companies for Diversity.
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Why You Can’t Buy
Cox Enterprises Stock
Unfortunately for investors, the Cox family is standing firm in its decision to keep the enterprise privately held. That means shares are not available for purchase by the public, and the company cannot be found on any public exchange. However, this hasn’t always been the case.
At one time, Cox Communications was a publicly traded company, but that changed in 2004. After years of aggressive competition in the cable industry, Cox Enterprises decided to buy all outstanding Cox Communications shares and return to private life.
Some industry experts voiced suspicions that the move was intended to give Cox more privacy – a definite advantage in such a competitive market. However, the company’s statement on the transaction was simple.
Management said that they had determined the constant attention to short-term quarterly results detracted from the company’s ability to focus on long-term success.
Through Cox Enterprises, which already owned 62 percent of Cox Communications, the Cox family announced the $7.9 billion purchase in August 2004. Cox Communications was offiicially delisted in December 2004.
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When to Buy Stock in
Communications Companies
It’s been a tricky year for the stock market, thanks to the novel coronavirus. The entire economy was growing at a solid clip when the year began, but extensive business closures and widespread unemployment caused a sudden, dramatic downturn. In fact, there were days in March that looked much like the start of the Great Depression.
Certain industries, travel in particular, don’t have a promising outlook when it comes to rapid recovery, but companies focused on media and communications are in a much better place.
As consumers spend more time at home, employees work from their home offices, and students master the art of e-learning, communications and media companies are in a good position to avoid the worst of the damage and see renewed growth sooner rather than later.
Those who want to add communication services to their portfolios are primarily looking at two possible options. Some of these organizations operate exclusively in information technology, which essentially creates and maintains connectivity for residential and business consumers.
Telecommunications companies, on the other hand, hold the infrastructure that makes these connections possible, and they provide the services that allow access to broadband internet, television, and mobile devices.
Both of these have promising futures, particularly when the rollout of 5G internet is considered.
The upgrade in network speeds will bring science fiction movies to life, and dramatic improvements in virtual reality, self-driving cars, smart homes, and smart cities will soon follow.
Communications companies play a critical role in standing up and delivering those services, which means plenty of opportunity for patient investors who buy and hold shares long-term.
Alternatives to Investing in
Cox Enterprises Stock
With Cox Enterprises off the table, there are three companies that stand out on the list of must-have communications stocks:
AT&T
There is very little AT&T doesn’t have a hand in when it comes to communications. The company has the second-largest mobile wireless network in the United States, and it owns DirecTV – the largest paid television service in the country.
In addition to those highly-lucrative businesses, AT&T owns WarnerMedia. That’s the company that brings you HBO, CNN, TNT, and franchise favorites like Harry Potter and DC Comics. True, DirecTV isn’t winning many new customers, and it has started seeing attrition in its base. However, AT&T’s exposure to 5G is expected to make up for any losses in the paid television space.
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Verizon
From the perspective of subscriber numbers, Verizon is in the top position among United States’ consumers. That means 5G is bound to be a goldmine for the company and its shareholders.
The expansion of 5G and related technologies will increase available services, and Verizon already has a solid foundation to capitalize on those developments.
Better still, as compared to AT&T, Verizon is in a slightly better position, because it doesn’t have as much to worry about with the move away from paid television.
While Verizon doesn’t have franchises like Harry Potter in its portfolio, it does have content providers like Huffpost and Yahoo!, both of which offer additional opportunity as the company pursues its growth strategy.
Netflix
No discussion of media and communications is complete without a comment about Netflix. This is the company that essentially created streaming video as we know it, and its on-going commitment to high-quality content and top-notch technology keep it well in-place as an industry leader.
Certainly, there are plenty of competitors coming up, but they are far enough behind in subscribers, content portfolio, and technology so as to be a non-issue. Disney+ may be the greatest cause for concern, but even that hasn’t dampened confidence in Netflix’s future prospects.
Netflix may have saturated the market in the United States, but there is a whole world that remains untapped – and Netflix is going after those markets with a strong sense of purpose, which could lead to a highly-profitable future.
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How to Buy Cox Enterprises
Stock Summary
Cox Enterprises and subsidiaries like Cox Communications may not be open to investors, but there are a variety of media and communications companies that could be profitable additions to well-diversified portfolios.
Ultimately, success in this market depends on innovation and technology integration. The companies that stay on the cutting edge of content and service delivery will attract and retain consumers. While Cox is an important player in that space, it certainly isn’t the only game in town.
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