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Readers of this space know that the investment bias favors U.S.-based companies, but there are exceptions, and America Movil SAB de CV (NYSE: AMX) is one.
America Movil, or just Movil, the largest cell phone service provider in Latin America, is another one of those large caps that was rudely treated by Wall Street, which took shares down to about $25 from the mid-$60s in FY2008.
After the stock market stabilized in early FY2009 as the financial crisis' acute stage passed, Wall Street "rediscovered" AMX's increasing market share in two key Latin American market's -- Brazil and Mexico. Further, likely impressive market share increases in Colombia and Peru should further support shares until regional economic growth takes hold in Q3/Q4. The First Call FY2009/FY2010 EPS estimates for AMX are $3.08 to $3.57.
Add the company's goal of a seamless digital roaming system across all countries served, and one has the makings of an enormous standardized market. Hence, the view from here argues now is the time for moderate-risk investors to take advantage of the current share price dip to scoop up some shares of Movil.
Stock Analysis: America Movil is a moderate-risk stock. Consider buying a 25% position in AMX now; then buy another 25% in four months, if Latin American economic conditions don't worsen substantially. Under any circumstance, don't buy more than 50% of your AMX position before October 2009. Sell/stop loss if you were to buy shares in this company: $17.
Disclosure: Lazzaro has no positions in stocks, but does own shares in two Pimco Bond Funds: PHDAX and PYMAX.
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