I Bought A Mexican Cellphone - AMX

I bought a Mexican, whoa oh, cellphone.




Next up in my evaluation of the Zacks Top 10 for 2008, America Movil (AMX):

Stock #10: Wireless carrier wires into new revenue sources. Already established in developed markets, they're targeting emerging markets for mega-gains in 2008. And they pay a healthy dividend.

Morningstar provides some background in its 5-star report:

America Movil's performance has been outstanding since it was spun out of Telmex in 2000. As Mexico's incumbent wireless provider, the company continues to dominate the country's cellular market with more than 70% share. Its extensive scale has helped lower its operating costs significantly, as it can avoid paying high interconnection costs and receive lower prices on equipment. This, in turn, has allowed America Movil to generate margins that are among the highest of wireless operators globally. While competition is expected to increase with deep-pocketed rival Telefonica becoming more aggressive, we believe the company's towering scale in Mexico will give it a leg up against competitors.

Morningstar continues by stressing AMX's expansion throughout Latin America, most notably, Brazil, while at the same time, increasing its margins in those countries.

Who else likes AMX? AMX rounded out Pequot Capital's Art Samberg's '08 picks:

Art Samberg, Chairman and CEO, Pequot Capital was one of Barron's 2008 Roundtable participants. He likes six U.S.-traded stocks...

Wireless provider America Movil stands to gain from a recent easing of competition that has seen minutes-of-use boom.

AMX looks like a promising choice for exposure to developing markets with perhaps less of the worry that accompanies those investments. Granted, its beta of 1.90 (according to Google Finance) means AMX does react to the markets (it's traded in a 12-point range over the last two months--that's quite whippy for a $58 stock).

On January 28, Standard & Poor's (NYSE:MHP) Ratings Services revised its outlook on its 'BBB+' long-term corporate credit rating on America Movil (NYSE:AMX) SAB de CV (AMX) to positive from stable.

'The rating action reflects the improvement in AMX's business and financial profile during the past five years and our expectations that its position as the leading wireless service provider in Latin America and its modest financial profile will allow the issuer to weather volatile market conditions and potential regulatory actions during the next 12 months,' said S&P's credit analyst Jose Coballasi.