Morningstar Rating

Stock Research and Analysis

by Michael Hodel, CFA

Bulls Say

The company generates positive free cash flow and is internally funding its growth. Cash flow beyond what is needed to expand will be used to increase the dividend, buy back stock, and make additional acquisitions.
America Movil has experience dealing with the vagaries of the Latin American market. It introduced the first prepaid phone system, which has been the key to expanding wireless telephone service in many markets.
If the firm is forced to relinquish market share in Mexico, it could finally open the door for a pay TV license. Read more 

Bears Say

A new reform act has been signed into law that aims at capping the market share any one firm can have at 50%.
IFT has cut the termination rate that AMX is allowed to charge to zero. However, AMX still must pay MXN 30 cents per minute to its competitors for interconnection until it complies with IFT's regulatory mandates.
The firm's Brazilian operations continue to underperform expectations owing to brand positioning and distribution problems as well as integration issues. Read more 

Management

America Movil remains under the control of Carlos Slim and his family, who own 55% of the firm's voting shares through a special class of supervoting shares. Although we do not like separate classes of stock, Slim has not attempted to benefit himself   Read more 

Profile

America Movil is the largest telecom provider in Latin America, serving more than 265 million mobile customers in 18 countries. It also provides fixed-line services to more   Read more 

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