By Paul Goodwin, Analyst and Editor of Cabot China & Emerging Market Report
From Cabot Wealth Advisory, 9/9/09 Sign up for free Cabot Wealth Advisory e-newsletter
American Movil (AMX) is a Mexican telecom company that's turning into a regionally dominant provider of voice and data network services. Founded in 2000, the company 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.
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Paul Goodwin Emerging Markets Specialist, Analyst and Editor of Cabot China & Emerging Markets Report
A researcher and writer for over 30 years, Paul Goodwin has been a member of the Cabot investment team and editor of
Cabot China & Emerging Markets Report since 2005. Under Paul’s stewardship, Hulbert Financial Digest rated Cabot China & Emerging Markets Report the number-one-rated newsletter of 2006 with a 78.6% gain for the year, the number-one-rated newsletter of 2007 with a 74.1% return, and the top-performing investment adivsory for five years with a 17.9% annual return.