America Movil Leads Latin America to Wireless Growth

Cabot
1.08K Followers

By Paul Goodwin

My investment idea today is a Mexican telecom company that’s turning into a regionally dominant provider of voice and data network services. Founded in 2000, American Movil (NYSE:AMX) provides both wireless and fixed-line communications, but it’s clearly the buildout of the wireless network that’s stirring things up.

The company offers the whole spectrum of cellular services, such as short messaging, content downloading, video streaming, GPS and Internet access in addition to standard fixed-line services like Internet, cable TV and data transmission.

With more than 180 million wireless subscribers and nearly four million fixed-line subscribers, America Movil has a presence in Mexico, Guatamala, Nicaragua, Ecuador, El Salvador, Brazil, Argentina, Colombia, the U.S. Honduras, Chile, Peru, Paraguay, Uruguay, the Dominican Republic, Puerto Rico, Jamaica and Panama. That’s a huge geographic base, which provides access to many emerging markets.

After a couple of quarters in which earnings dipped slightly, the company showed a 5% gain in earnings in Q2 with a 24.0% after-tax profit margin. The stock pays a small dividend (1.0%) and has 280 institutional investors on board, leaving lots of room for growth. The stock put in a double bottom at 23 last November and March, and has pulled back slightly after doubling off that bottom.

As the Latin American region begins to power back up after the global recession, America Movil will be leading the way.

This article was written by

1.08K Followers
Timothy Lutts is CEO and chief investment strategist at the Cabot Wealth Network, one of America’s most respected independent investment advisory services, publishing 15 advisories to over 250,000 subscribers around the world since 1970. He leads a dedicated team of professionals who serve investors with high-quality investment advice based on time-tested Cabot systems. Tim is also the chief analyst of Cabot Stock of the Week and Cabot Marijuana Investor.His other colleagues include growth stock and market timing expert Michael Cintolo, is chief analyst of Cabot Growth Investor and Cabot Top Ten Trader. Since joining Cabot in 1999, Mike has uncovered exceptional growth stocks and helped to create new tools and rules for buying and selling stocks. Jacob Mintz is a professional options trader and chief analyst of Cabot Options Trader. Using his proprietary options scans, Jacob creates and manages positions in equities based on risk/reward and volatility expectations. Jacob developed his proprietary risk management system during his years as an options market maker at a top-tier options trading company in Chicago.Tom Hutchinson is the chief analyst of Cabot Dividend Investor and Cabot Income Advisor. He oversees Cabot's proprietary Individualized Retirement Income System (IRIS) to deliver income-oriented advice that could provide both high income and peace of mind to investors during retirement.

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