"Investors continue to underestimate the growth potential at Ericsson (NASDAQ: ERIC)," says global analyst Yiannis Mostrous in The Silk Road Investor. He considers the stock a core holding.
The Sweden-based company develops and produces advanced systems and products for wired and mobile communications in public and private networks and produces mobile phones through a joint venture with Sony.
Mostrous notes, "The company operates in one of the most promising segments of the global economy, where the demands of bigger and better networks increase almost daily."
According to the advisor, "It's currently upgrading networks for more than 50 phone companies, with about 6 million customers signing up for faster mobile access each month globally." Industry experts, he points out, expect mobile subscribers to surpass 5 billion in the next five years.
The advisor explains, "Emerging markets are important because they continue to build huge wireless networks, with China and India at the forefront. Ericsson is the world's leading architect of mobile systems (the premium segment in telecommunications) and should be the big beneficiary."
He notes that the company announced strong projected growth for the remainder of the year and reiterated its previous target for 5% growth in its main market for 2007. He adds, "Given that the company's management has avoided exaggerated comments in the past, I expect its projections to materialize."
Overall, Mostrous concludes, "I view Ericsson as a core holding for long-term, growth-oriented investors, as I believe that wireless telecom is one of the best long-term growth stories."
Each day, Steven Halpern's TheStockAdvisors.com features the latest stock picks and investment ideas from the nation's leading financial newsletter advisors.
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