Profiting with the Spanish Conquistadors 2

Nicholas Vardy

Nicholas Vardy has a unique background that has proven his knack for making money in different markets around the world.

Established in 1924, Telefonica is Spain’s dominant domestic telecom with more than 16 million fixed lines and more than 22.4 million mobile customers. But Telefonica’s global footprint extends across three continents and 23 countries with a total population of 670 million. This conquistador planted its first flag in Latin America 15 years ago. Having invested more than Euro 70 billion ($103 billion) in infrastructure and acquisitions since the early 1990s, Telefonica today is the leading telecom in Brazil, Argentina, Chile and Peru. It also has substantial operations in Colombia, Ecuador, El Salvador, Guatemala, Mexico, Morocco, Nicaragua, Panama, Puerto Rico, Uruguay and Venezuela.

Outside of its home market of Spain, Telefonica also operates in the United Kingdom, Ireland, Germany and the Czech Republic. The company has amassed more than 35.8 million cell phone customers and close to 2.3 million landline accesses in the region. Last year, Telefonica won a bid to provide 3G services in Slovakia for a period of 20 years. The company recently launched a high-profile acquisition of a controlling stake in peer Telecom Italia SpA by teaming with a group of Italian investors. Apple also has selected O2, a U.K.-based cell phone provider owned by Telefonica, to launch the iPhone in Europe.

For an organization that is already the fifth-biggest telecom company in the world with close to 207 million customers, Telefonica’s profits are still expanding at a breathtaking rate. Just last week, Telefonica announced that its third-quarter net profit rose 39% year-on-year. Overall, net profit jumped to €4.02 billion from €2.9 billion a year earlier.

Telefonica’s results were boosted by a €1.4 billion ($2.05 billion) capital gain from the sale of a stake in TV producer Endemol NV and sustained growth in key Latin American and Spanish markets. This is all part of Telefonica’s strategy of selling non-core assets as it aims to strengthen its operations in Europe and Latin America.

Exclusive  Revisiting a Healing Molecule

Also important to us, Telefonica is a stock that has held up remarkably well despite the recent market jitters. While global markets were volatile and flat last week, Telefonica actually hit a record high on Friday. So buy Telefonica at market today and place your stop at $82.50. For even bigger potential gains, buy the March 105 calls (TEFCA.X).


To make room for Telefonica, let’s close our position in the iShares MSCI Hong Kong Index (EWH) at a slight profit in the stock and a loss in the options. The mainland Chinese market has plummeted from its peaks and the bubble just might have been pricked, as the market’s progression now looks remarkably identical to the NASDAQ collapse in 2000. On a more fundamental level, Chinese authorities recently have announced short-term restrictions on mainland Chinese investments out of the country, which, in addition to global jitters, will act as a further cap on Hong Kong’s short term prospects.

share on:

Like This Article?
Now Get Our FREE Special Report:
Alternative Investing: Investing in Timber

Stock Investor editor Paul Dykewicz reveals why investing in timber may be one of the best long-term portfolio strategies you'll find today.

Get Access to the Report, 100% FREE

share on:


Dr. Mark Skousen

Named one of the "Top 20 Living Economists," Dr. Skousen is a professional economist, investment expert, university professor, and author of more than 25 books.

Product Details

  • Forecasts & Strategies
  • Home Run Trader
  • Fast Money Alert
  • Five Star Trader
  • TNT Trader

Bryan Perry

A former Wall Street financial advisor with three decades' experience, Bryan Perry focuses his efforts on high-yield income investing and quick-hitting options plays.

Product Details

  • Cash Machine
  • Premium Income PRO (exclusively for subscribers of Cash Machine)
  • Quick Income Trader
  • Breakout Options Alert
  • Hi-Tech Trader

Jim Woods

Jim Woods has over 20 years of experience in the markets from working as a stockbroker,
financial journalist, and money manager. As well as a book author and regular contributor to
numerous investment websites, Jim is the editor of:

Product Details

  • Successful Investing
  • High Velocity Options
  • Intelligence Report
  • Bullseye Stock Trader
  • Eagle Eye Opener

Bob Carlson

Bob Carlson provides independent, objective research covering all the financial issues of retirement and retirement planning. In addition, Bob serves as Chairman of the Board of Trustees of the Fairfax County (VA) Employees’ Retirement System, which has over $2.8 billion in assets.

Product Details

  • Retirement Watch
  • Retirement Watch Spotlight Series
  • Lifetime Retirement Protection Program

Jon Johnson

Jon Johnson's philosophy in investing and trading is to take what the market gives you regardless if that is to the upside or downside. For the past 21 years, Jon has helped thousands of clients gain success in the financial markets through his newsletters and education services:

Product Details

  • Investment House Daily
  • Stock of the Week
  • Technical Traders Alert
  • Rapid Profits Stock Trader

Used by financial advisors and individual investors all over the world, is the premier provider and one-stop shop for dividend information and research.

Product Details

Popular tools include our proprietary Dividend Calendar, Dividend Calculator, Dividend Score Card, and many more.

  • Dividend Investor