To record a stream into a movie file, do the following steps:-

1. Open VLC
2. Open the stream URL (Media > Open Network Stream)
3. Under Tools>Preferences
4. Pick Input/Codecs
5. Find record directory or filename
6. Click Browse and select your destination folder
7. Click Save at the bottom
8. Now click View>Advanced Controls
9. You will see red Record button under the movie panel
10. To start recording click Record, to stop click the same button again
11. Your movie file is saved to destibation folder with the same format as you received it (.ts, .mpeg, .avi etc)

To edit or cut the video:-

1. Open the movie file (Media>Open File)
2. Click the timer slider to where you want to start recording
3. Click red button Record
4. Click it again to stop
5. The file is saved with the same format as the original one

To convert the file to other format such as .mp4:-

1. Click Media>Conert/Save
2. Click Add button and select your movie file
3. Click button Convert/Save
4. Select the required format under Profile
5. Click Settings icon and pick Audio Codec
6. Select MPEG4 Audio (AAC) – I did this because the default option result in muted video with no sound
7. Click Save
8. In Destination File box, click Browse, go to your destination folder and name a file
9. Click start