CHICAGO - (Business Wire) Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include:
Vivo Participações S.A. (NYSE:
VIV),
Telemig (NYSE:
TMB),
America Movil (NYSE:
AMX),
Vodafone (NYSE:
VOD) and
Agrium (NYSE:
AGU).
See the latest posts to the Analyst Blog: http://www.zacks.com/blog/post_info.html?g=6
Here are highlights from Monday’s Analyst Blog:
Vivo Participações Called a Buy
We are keeping our Buy recommendation on Vivo Participações S.A. (NYSE: VIV). The company has a dominant position and a strong brand in the fast-growing Brazilian wireless business. First quarter operating results were very positive, including continued debt reduction.
The short-term outlook remains encouraging due to positive industry trends coupled with the improvement in the Brazilian economic environment. Finally, the acquisition of Telemig (NYSE: TMB) and the new bands in all the regions where the company was not yet authorized to operate were positive news.
Presently, Vivo is trading at 34.1x our estimated 2008 earnings, and 5.3x its enterprise value to 2008 EBITDA (a more common valuation metric for the wireless industry). The high P/E is a result of the low expected net income, since the company has been recovering from a difficult period. In this case, we believe it is better to analyze the EV/EBITDA [enterprise value-to-earnings before interest, taxes, depreciation and amortization] ratio.
We understand the current valuation of VIV is attractive if compared to other international wireless players like America Movil (NYSE: AMX) or Vodafone (NYSE: VOD). Moreover, if we analyze the Price/sales ratio the stock also seems to be highly undervalued. We think that the company has a strong brand in Brazil and is posting improved results every quarter, including positive operating numbers and a declining net debt.
Agrium Has Room for Growth
Agrium (NYSE: AGU) is growing through acquisition and incremental expansion of existing operations. The proposed UAP acquisition is likely to drive revenues and profits for Agrium on the back of expanded product line in the major business segment.
The company recently announced the $2.7 billion UAP acquisition. In the retail business, the company has a market share of 16% after the acquisition of UAP. An amount of $115 million in synergies may be achieved from the UAP retail acquisition by 2010.
Supply/demand is strong for nitrogen and phosphate fertilizers, and the company has high leverage to increasing product prices. Strong prices for most of the major grains and oilseeds are likely to benefit the three business units of the company. Agrium also has significant free cash flow.
Get the full analysis of all these stocks by going to http://at.zacks.com/?id=2649.
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