Yes. The lion hearted must also move quickly. In the mail, as a holder of BTM, shortly after writing the article, I received what appeared to be a tender offer for my BTM shares. It was quite lengthy and did not have time to read the details and/or ensure that my shares would be bought out (although the offer did appear that way). Anyway, with BTM not moving up or down much, and TNE going down way more than appears reasonable, I decided to exit BTM more or less at my entry point. (I hope I do not regret that as the $42 buyout would have been a clear profit). I did this because TNE appeared to be going down so low and fast that I wanted dry powder. Now at 22/sh, it is way lower than I thought it would go and I need to see whether any real reason supports its decline or whether it simply is an irrational market making it an even better buying opportunity than I earlier thought it was. I am also keeping an eye on commodities and drybulk shipping. Again, unlike the more diversified American economy, Brazil is a commodity driven country. It makes no sense for its stocks to be going down right now. Do your own due diligence, but I think that after the American presidential election and position on Iraq and interest rates becomes more clear (not necessarily better, just more clear), larger amounts of money will start pouring into the market again. And again, due to commodities, Brazil's economy should be one of those that rises more quickly than others. Meanwhile, I am frustrated that things aren't moving in that direction a bit more quickly. Everyone should do their own due diligence, and these are just my personal opinions, but right now I believe cash and/or commodities are king... Hopefully, we'll see a bit of move up on Monday, I will continue to watch TNE for a bottom now (and would appreciate any technical support anyone else can provide as I almost bought into last week and now am perplexed as I never would have thought it would go down to 22/sh). Of course, one advantage to staying out of an irrational market is that it is less likely to drive you crazy. I think I'm good at spotting trends, but again, I'd appreciate it if someone with some technical skills would suggest support levels for TNE. Thanks. Reply
I bought into BTM last year when Shrub made his visit to Brazil.
I deeply regret that I only nibbled on the stock and did not take a bigger position, since it is up 135% since then. And it went up so fast I did not buy more in the low $20. Riches go to the lion hearted. Reply
There's some confusion floating around here. BTM and BRP are equivalent to the preferred stock of Brasil Telecom and BT Participacoes (1 BTM ADR = 3 pref shares of BT; 1 BRP ADR = 5 pref shares of BT Part). Tele Norte Leste Participacoes is acquiring all the common shares of BT and BT Part. TNLP is also making a voluntary tender offer for 1/3 of the preferred shares of BT and BT Part. The tender offer is R$30.47 for BT Part pref shares and R$23.42 for BT pref shares, currently equivalent to $91.59 for BRP and $42.24 for BTM. But since TNLP will not acquire all of the pref shares, the price could eventually go higher after the takeover. It could also fall significantly after the takeover, of course.
I don't understand Amberger's comment that BTM's stock price seems buffered from the price fluctuations of its parent company. It looks to me like the prices of BTM and BRP have been moving roughly together, at least since the beginning of the year.
Personally, I think TNE is the buy here. (This is not a recommendation, of course. Do you own research before buying anything.)
Disclosure: I have a long position in BTM for one client. I have long positions in TNE for many clients and for one family member. Reply
i dont know what you are talking about, the company will be merged into TNE, in no way there will be a doubble and i dont see which analyst has a target of 61, if so he must be drunk or the target must be one before the takeover news. Reply
One thing that you forget to mention is the fact that brazil recently deregulated the telecommunications industry. It used to be that a tel co could just operate in a state (of which i think brazil has about 17) as of a couple of months ago this is changed and brazil is wide open. look for consolidation. If you like brazil plays check out viv (cell phone c0- reports in a few days- a cheap adr at around 7 dolla' Reply
Well I'm not a currency expert - but this company doesn't seem to be affected by the dollar because they don't generate revenue outside of Brazil. Reply
Great pick. The stock's also trading quite undervalued on technicals. I see it as a value pick up to $36 per share and a growth pick afterwards. Don't forget Brazil's crop exports help fuel growth. Reply
Latin American stocks have been looking pretty hot this year; both 52 weeks and even more so, just in 08. While America looks like Rome falling, South America (particularly Brazil) looks like it will soon come to rise as an area of equivocal development. More importantly to us right now though is that as developed products continue to steadily spread through out, the value of the companies guiding the distribution are going to grow in harmony with that spread. One product in particular that I like in Brazil is wireless.
From 2005 to 2007 Brazil's wireless subscriber base grew by just under 50% approaching 120 million (~2/3 of the pop.), and Oi, the Tele Norte Leste Participacoes S.A. (TNE) wireless brand, was there to capture that growth, and looks like it will continue to do so. TNE has had a strong hold over the land lines industry for a long time, but that business, which represents a little less than half of their revenue, has not been going any where as it looms as a thing of the past. They also provide internet, digital tv, etc... wireless only represented about 16% of their business in the middle of '07. They recently acquired a bunch more licenses to expand their wireless business in Brazil and I think that will help increase their value.
TNE does $10.29 bil in revenue, has a market cap of 9.91 bil, but has $2 bil more debt than cash (which is common to the industry, in a smaller proportion). Their cash flow is pretty high though, and they have been good about paying off their debt. Institutional owner ship is less than 50% and about 2 million shares trade per day. Other players in the industry including Tele Norte Celular Participacoes (TCN), Telecomunicacoes de Sao Paula (TSP) and Vivo Participacoes (VIV) are all trading at higher earning multiples, and so is the Mexican giant America Movil (AMX). In the 8 times trailing and future earnings range TNE looks like a good buy with a lot of growth potential. If the conference call goes well this Friday I would expect TNE to continue on its upward trend.
If you like my comment, check out my new blog at DanielNathel.Blogspot....
Disclosure: I may or may not purchase any or all the companies included in this article. Reply
loading ...
trader
Brazilian Telecom Going Monopolistic [view article]
Yes. The lion hearted must also move quickly. In the mail, as a holder of BTM, shortly after writing the article, I received what appeared to be a tender offer for my BTM shares. It was quite lengthy and did not have time to read the details and/or ensure that my shares would be bought out (although the offer did appear that way). Anyway, with BTM not moving up or down much, and TNE going down way more than appears reasonable, I decided to exit BTM more or less at my entry point. (I hope I do not regret that as the $42 buyout would have been a clear profit). I did this because TNE appeared to be going down so low and fast that I wanted dry powder. Now at 22/sh, it is way lower than I thought it would go and I need to see whether any real reason supports its decline or whether it simply is an irrational market making it an even better buying opportunity than I earlier thought it was. I am also keeping an eye on commodities and drybulk shipping. Again, unlike the more diversified American economy, Brazil is a commodity driven country. It makes no sense for its stocks to be going down right now. Do your own due diligence, but I think that after the American presidential election and position on Iraq and interest rates becomes more clear (not necessarily better, just more clear), larger amounts of money will start pouring into the market again. And again, due to commodities, Brazil's economy should be one of those that rises more quickly than others. Meanwhile, I am frustrated that things aren't moving in that direction a bit more quickly. Everyone should do their own due diligence, and these are just my personal opinions, but right now I believe cash and/or commodities are king... Hopefully, we'll see a bit of move up on Monday, I will continue to watch TNE for a bottom now (and would appreciate any technical support anyone else can provide as I almost bought into last week and now am perplexed as I never would have thought it would go down to 22/sh). Of course, one advantage to staying out of an irrational market is that it is less likely to drive you crazy. I think I'm good at spotting trends, but again, I'd appreciate it if someone with some technical skills would suggest support levels for TNE. Thanks. ReplyBrasil Telecom a Steal Below $35 [view article]
Foreign currency is definitely a concern with this one. I will have to see what happens to the US dollar when it comes to this stock. ReplyBrazilian Telecom Going Monopolistic [view article]
I bought into BTM last year when Shrub made his visit to Brazil.I deeply regret that I only nibbled on the stock and did not take a bigger position, since it is up 135% since then. And it went up so fast I did not buy more in the low $20. Riches go to the lion hearted. Reply
Brasil Telecom a Steal Below $35 [view article]
So with the takeover negotiations over - is BTM a continued legitimate hold or will it be absorbed into the parent company? ReplyThompson
Brasil Telecom a Steal Below $35 [view article]
There's some confusion floating around here. BTM and BRP are equivalent to the preferred stock of Brasil Telecom and BT Participacoes (1 BTM ADR = 3 pref shares of BT; 1 BRP ADR = 5 pref shares of BT Part). Tele Norte Leste Participacoes is acquiring all the common shares of BT and BT Part. TNLP is also making a voluntary tender offer for 1/3 of the preferred shares of BT and BT Part. The tender offer is R$30.47 for BT Part pref shares and R$23.42 for BT pref shares, currently equivalent to $91.59 for BRP and $42.24 for BTM. But since TNLP will not acquire all of the pref shares, the price could eventually go higher after the takeover. It could also fall significantly after the takeover, of course.I don't understand Amberger's comment that BTM's stock price seems buffered from the price fluctuations of its parent company. It looks to me like the prices of BTM and BRP have been moving roughly together, at least since the beginning of the year.
Personally, I think TNE is the buy here. (This is not a recommendation, of course. Do you own research before buying anything.)
Disclosure: I have a long position in BTM for one client. I have long positions in TNE for many clients and for one family member. Reply
Brasil Telecom a Steal Below $35 [view article]
i dont know what you are talking about, the company will be merged into TNE, in no way there will be a doubble and i dont see which analyst has a target of 61, if so he must be drunk or the target must be one before the takeover news. ReplyBrasil Telecom a Steal Below $35 [view article]
One thing that you forget to mention is the fact that brazil recently deregulated the telecommunications industry. It used to be that a tel co could just operate in a state (of which i think brazil has about 17) as of a couple of months ago this is changed and brazil is wide open. look for consolidation. If you like brazil plays check out viv (cell phone c0- reports in a few days- a cheap adr at around 7 dolla' ReplyBrasil Telecom a Steal Below $35 [view article]
Well I'm not a currency expert - but this company doesn't seem to be affected by the dollar because they don't generate revenue outside of Brazil. ReplyBrasil Telecom a Steal Below $35 [view article]
What happens if you buy this stock, and later, the dollar gains 20%.Wouldn't that bring your net earnings DOWN?
Cajun in New Orleans Reply
Brasil Telecom a Steal Below $35 [view article]
Great pick. The stock's also trading quite undervalued on technicals. I see it as a value pick up to $36 per share and a growth pick afterwards. Don't forget Brazil's crop exports help fuel growth. ReplyBrasil Telecom a Steal Below $35 [view article]
interesting and util. ReplyEditors
General Discussion on BTM
Is this a buy or a sell? ReplyNathel
Eight Brazilian Telecom Stocks Worth Calling [view article]
Latin American stocks have been looking pretty hot this year; both 52 weeks and even more so, just in 08. While America looks like Rome falling, South America (particularly Brazil) looks like it will soon come to rise as an area of equivocal development. More importantly to us right now though is that as developed products continue to steadily spread through out, the value of the companies guiding the distribution are going to grow in harmony with that spread. One product in particular that I like in Brazil is wireless.From 2005 to 2007 Brazil's wireless subscriber base grew by just under 50% approaching 120 million (~2/3 of the pop.), and Oi, the Tele Norte Leste Participacoes S.A. (TNE) wireless brand, was there to capture that growth, and looks like it will continue to do so. TNE has had a strong hold over the land lines industry for a long time, but that business, which represents a little less than half of their revenue, has not been going any where as it looms as a thing of the past. They also provide internet, digital tv, etc... wireless only represented about 16% of their business in the middle of '07. They recently acquired a bunch more licenses to expand their wireless business in Brazil and I think that will help increase their value.
TNE does $10.29 bil in revenue, has a market cap of 9.91 bil, but has $2 bil more debt than cash (which is common to the industry, in a smaller proportion). Their cash flow is pretty high though, and they have been good about paying off their debt. Institutional owner ship is less than 50% and about 2 million shares trade per day. Other players in the industry including Tele Norte Celular Participacoes (TCN), Telecomunicacoes de Sao Paula (TSP) and Vivo Participacoes (VIV) are all trading at higher earning multiples, and so is the Mexican giant America Movil (AMX). In the 8 times trailing and future earnings range TNE looks like a good buy with a lot of growth potential. If the conference call goes well this Friday I would expect TNE to continue on its upward trend.
If you like my comment, check out my new blog at DanielNathel.Blogspot....
Disclosure: I may or may not purchase any or all the companies included in this article. Reply