The 3rd stock I like is NII or NIHD, a provider of digital wireless communications
services. The stock has hit a low of US$0.60
1) the 3rd largest operator of the Nextel brand in Brazil, an emerging country with huge potential. Remember Singtel share price was at $1 before the increase of 1.5 million population. The share price has since increase by about 250%
2) This industry has a high barrier to entry as it require huge investment and a high burn up rate of operation cost. It calls for capable management The CEO is from Stanford and Cornell university and I believe in his capability in moving the company forward.
3) NII Holdings has Agreement with Apple to Bring iPhone to its Nextel Brazil Operations
4) This stock is 28% short some 41 millions shares at least not including the naked shorts probably more like 50% short my guess.
5) Many big institutions are still holding their shares or bought more such as Blackrock
6) nihd complete infrastructure that's up and running
7) they are a proven company with income of approx. 5b
8) they have laid future plans by negotiating deals with well known companies like telefonica,apple,etc.
9) they have taken cost restraints to limited loses and improve liquidity
10) they foreign currency advantage which translates into more revenue going forward
11) they have worked and now see the result of new telecom laws coming into play that will guarantee them more share of their market which means revenue revenue & more revenue
12) they have ""re-installed/brought back"" the same ceo who bought them to historical heights and who is very well known and respected in the telecom field..this is why the largest companies in the world hold nihd stock.
The Risk:
1) Though they have ample working capital of $2.4-2.7 billion in the bank, is considering options to meet financial obligations and fund the business in 2015 and after.
2) "Anaylst rate NII HOLDINGS INC (NIHD) a SELL. The
company's weaknesses can be seen in multiple areas, such as its feeble growth
in its earnings per share, deteriorating net income, disappointing return on
equity, weak operating cash flow and generally high debt management risk."
Highlights from the analysis by TheStreet Ratings Team goes as
follows:
§ NII HOLDINGS INC has experienced a steep decline in earnings per
share in the most recent quarter in comparison to its performance from the same
quarter a year ago. Earnings per share have declined over the last two years.
We anticipate that this should continue in the coming year. During the past
fiscal year, NII HOLDINGS INC swung to a loss, reporting -$4.15 versus $1.31 in
the prior year. For the next year, the market is expecting a contraction of
49.6% in earnings (-$6.21 versus -$4.15).
§ Return on equity has greatly decreased when compared to its ROE
from the same quarter one year prior. This is a signal of major weakness within
the corporation. Compared to other companies in the Wireless Telecommunication
Services industry and the overall market, NII HOLDINGS INC's return on equity
significantly trails that of both the industry average and the S&P 500.
§ Net operating cash flow has significantly decreased to -$62.41
million or 156.91% when compared to the same quarter last year. In addition,
when comparing to the industry average, the firm's growth rate is much lower.
§ Despite any intermediate fluctuations, we have only bad news to
report on this stock's performance over the last year: it has tumbled by
76.49%, the company's earnings per share are down 372.22% compared to the
year-earlier quarter. Naturally, the overall market trend is bound to be a
significant factor.
Conclusion:
The risk reward is favourable considering the stock is still worth at least US$1 Buying at this low price, the return can be astronomical and loss manageable.
