Telefonica: Great Company with a Bright Future

| About: Telefonica S.A. (TEF)

Telephonica SA (NYSE: TEF)

Originally recommended on November 6, 2006 (IWB #2639) at $58.23.

Closed Friday at $81.27. (All figures in U.S. dollars unless otherwise stated.)

The shares of this telecommunications giant, which operates in Spain and Latin America, held up remarkably well during the stock market sell-off. Their lowest price was $46.69, hit last October. The stock bounced back quickly from there, slumped again for a while during the winter, and then took off on an extended rise which carried it past the $80 mark earlier this month.

The company reported second-quarter financial results that were essentially flat on a year-over-year basis - not a bad result in the context of a deep global recession. Revenue for the first half of the fiscal year was €27.59 billion compared to €28.15 billion in 2008. Profit from continuing operations was €3.68 billion compared to €3.69 billion last year.

I still think this is a great company with a bright future. However, we have a gain of 39.6% based on my original recommended price so you may want to pocket some of that money.

Action now: Take half-profits.