This week’s Global Bull Market Alert pick, NII Holdings (NIHD), also focuses on the opportunities in the global cell phone sector. Formerly known as Nextel International and headquartered in Reston, Virginia, NII Holdings Inc. provides digital wireless communication services primarily for business customers in fast-growing Latin American economies. Today, only about 40% of Latin America’s population subscribes to wireless phones.
NII Holding’s mobile networks support digital mobile telephone services, Internet services, Global Positioning System technologies, and specialized mobile radio services across markets that include Mexico, Brazil, Peru, Chile, and Argentina. NII Holdings smartly focuses on the highest margin business customers. That is why it boasts the highest revenue per subscriber and the lowest churn rates in Latin America.
NII Holdings is all about future growth. And there is no better way to summarize how much you are paying for a company’s future growth than a company’s PEG (Price Earnings to Growth) ratio. The technical definition of the PEG ratio is the estimated next 12-month’s P/E divided by projected earnings growth, annualized, over the next five years. NII Holdings’ earnings are expected to grow at an eye popping 58% in 2007, and an average of more than 42% per annum over the next 5 years. That puts its PEG ratio at .69. Anything below 1 is a real bargain.
Investment bank Lehman Brothers has a $100 price target on the stock. That’s almost a 37% upside from its current trading price. Raymond James recently upgraded it to a strong buy. Business Week also regularly includes NII Holdings as one of the Top 100 Information Technology companies, while Forbes recently listed it among the 25 Fastest-Growing Tech companies in the U.S.
So buy NII Holdings (NIHD) at market today and place your stop at $63.80. For even more potential upside, buy the June $75 call options (QHQFO.X)
P.S. Don’t forget that I’ll be speaking at the The Money Show this week in Orlando, Fla. If you cannot attend, you still can see me live via webcast. My presentation, The Top 10 Home Run Stocks at Home and Abroad, will take place Friday, Feb. 9, between 8:55 a.m. and 9:40 a.m. I will be joined by my friend Dr. Mark Skousen, an acclaimed economist and stock picker. Please click here to access the webcast.