Millicom International Cellular Dials Up Growth

Jun.15.07 | About: Millicom International (MIICF)
Millicom International Cellular SA (MICC) always seems to find support at its 50-day moving average, and it just bounced off it last Friday.

The provider of cellular phone services has made gains for 10 straight months, leaping 141% since the end of July 2006. Except for brief stints last week and in early March, Millicom has remained above its 50-day moving average since the Nasdaq broke out of its summer doldrums in mid-August 2006.

The company, which is based in Luxembourg, has almost 17 million customers in 17 emerging markets in Latin America, Africa and Asia. Most of the countries it operates in have very poor telephone service, making cellular service an easy sell.

First-quarter earnings reported April 24 roared 939% to $3.43 per share, while revenues jumped 86% to $563 million and the number of customers increased 94%. About 95% of the accounts are prepaid.

Millicom traded as high as 84.75 in February 2000 before plunging to 25 cents in October 2002. It did a 1-3 reverse split in February 2003, just as the Nasdaq was starting to recover, and ended that year at $70 for a gain of more than 1,200%.

It traded as high as 90.74 before completing a 4-1 split in February 2004. Its post-split 2004 high was 28.51 that April, and it based for 21 months before breaking out again in January 2006. The stock jumped 130% last year and is up 42% this year.

Millicom is about 6% off its June 1 high of 92.69.

Possible Strategy: buy at 87.50 or less with a sell stop at 79.99.

MICC 1-yr chart

MICC

Disclosure: none