Investors in America Movil(NYSE: AMX), Latin America’s largest cellular operator, certainly have the money these days to splurge on the latest third-generation (3G) handsets.
After all, shares of the company – controlled by Mexican billionaire Carlos Slim – have been on a tear, doubling over the past year. They currently trade within a whisker of their record high of $26.15, reached on Sept. 28.
Whew, that’s a heady gain. It beats the pants off the 16% gain recorded by the NYSE Composite Index over the same period and is well ahead of the 50% jump posted by AMEX Mexico Index. Still, it raises the question of whether investors should hang up on or hang on to the stock.
Hmm… (That’s not a dial tone but the sound of me pondering.)
Let’s take a quick look at the facts.
America Movil has benefited from rapid subscriber growth in each of the eleven markets it currently serves in the Americas (the company reported a total of 73.8 million wireless subscribers for the quarter ended June 30, 2005, up 11% sequentially and a whopping 47% increase over last year’s period). Favorable currency translations (the Mexican peso and the Brazilian real gained, respectively, 4.8% and 12.8% against the dollar in the most recent quarter) haven’t exactly hurt the company, either.
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America Movil Probably Tripled 4th-Qtr Net on Record New Users
America Movil SA, the mobile-telephone carrier controlled by billionaire Carlos Slim, may report that fourth-quarter profit more than tripled as it signed up a record number of subscribers.
Net income surged to 6.13 billion pesos ($586 million), or 32 cents per U.S.-traded share, from 1.64 billion pesos a year earlier, according to UBS AG's Stephen Graham, the No. 1 analyst in the Bloomberg Absolute Return Ranking of nine America Movil analysts. The Mexico City-based company will report earnings today after 4 p.m. New York time.
The jump in earnings shows
South Korean handset manufacturer Pantech has signed a deal with America Movil, a mobile operator in Central and South America, to supply 500,000 mobile phones by the end of this year.
Under the deal, Pantech is to sell 300,000 cellular phones to Mexico and 200,000 units to Argentina and Colombia through America Movil. The contract is expected to cement its presence in the Mexican market and pave the way for its efforts to sell more handsets in the region, Pantech said.
Pantech hopes to make future deals with mobile providers in Europe and the Americas.
After Pantech absorbed its newly
Mexico's main stock index fell for a second day, led by America Movil SA, Latin America's biggest mobile telephone company.
Mexico's Bolsa fell 197.76, or 1.3 percent, to 15,247.61 at 10:30 a.m. New York time.
Following are the stocks that are most active in the Mexican market. Brazil's stock exchange is closed for a religious holiday.
Mexico
Vitro SA (VITROA MM), Mexico's largest glassmaker, rose 63 centavos, or 5.2 percent, to 11.50 pesos. Vitro SA said yesterday that it began a formal process to sell two corporate office buildings at its Monterrey area headquarters and will use the proceeds to
Telecom de El Salvador, America Movil's subsidiary in the Central American nation, said on Wednesday it expects to invest $160 million through 2006 to expand its network across the country.
America Movil, the biggest Latin American cellular operator, is owned by Mexican billionaire Carlos Slim and has been on a shopping spree for the past two years in a race for supremacy in the region against Spain's Telefonica (TEF.MC: Quote, Profile, Research).
"We will make important investments to continue expanding cellular coverage," Telecom chief executive Alberto Davison told reporters.
As of July, Telecom de El Salvador had about 634,000 mobile subscribers and some
The following stocks may make significant gains or losses in Latin America today. Symbols are in parentheses after the company name and stock prices are from the last session.
Mexico
America Movil SA (AMXL MM): Martin Lara, an analyst with Santander Central Hispano SA, recommends investors should sell mobile carrier America Movil and buy fixed-line company Telefonos de Mexico SA (TELMEXL MM) in a Sept. 19 report. Telmex's price-to- earnings ratio is 8.7, while America Movil's ratio is 21.9, Lara said. ``Telmex has become an attractive short-term option versus America Movil because Telmex's low multiples do not accurately reflect the
