LowIQinvestor Posted November 7, 2013 Share Posted November 7, 2013 "From Telecom Italia Call: Will Get €2B from Asset Sales, Italian, Brazilian Towers, Says Received Signed Unsolicited Offer for Telecom Argentina" This news seems to be flying under the radar... Dominant Telecom Co in Argentina valued around 7 PE. Potential dividend distribution by EOY 2013 I'll post more later...but wanted to get this out to everyone since the price is not reflecting the news announced just 30 mins ago! Link to comment Share on other sites More sharing options...
LowIQinvestor Posted November 11, 2013 Author Share Posted November 11, 2013 From today's WSJ: BUENOS AIRES—As head of a hedge fund that specializes in distressed debt, David Martinez has had lots of practice trying to figure out when an asset's value has been beaten down so much that it is a buy. He has just made an unusual call: Invest in Argentina. Mr. Martinez's investment group, Fintech Advisory, plans to buy Telecom Argentina TECO2.BA +1.23% and related assets for $960 million from Telecom Italia, TIT.MI +1.91% which is selling its Argentine unit to pay down debt. Mr. Martinez confirmed the purchase Friday. "Argentina presents incredible long-term growth opportunities, in my view the highest in Latin America," said Mr. Martinez in an interview. "There is tremendous value in the company. Clearly Argentine values are depressed, but the long-term potential is overwhelming." Link to comment Share on other sites More sharing options...
LowIQinvestor Posted December 3, 2013 Author Share Posted December 3, 2013 TEO currently trades at $18.50 / share around a 6 PE and has positive net cash on the balance sheet ( rare for a telecom co.) dividend uncertainty, political risk and inflation weighing on valuation. Political risk could diminish in 2015 with a new admin. If this traded in line with other telco's there is at least 50% upside. Take a look Link to comment Share on other sites More sharing options...
LowIQinvestor Posted December 4, 2013 Author Share Posted December 4, 2013 Downside potential: 10%? Downside logic: $2.4 EPS x 5 PE = $16.6/share ( includes $4.6 cash) Upside Potential: 87%? Upside logic: $3 EPS x 10 PE = $34.6/share ( includes $4.6 cash) Link to comment Share on other sites More sharing options...
frommi Posted December 4, 2013 Share Posted December 4, 2013 I have no clue, but i would say investing in Argentina has always a 100% possible downside. ;D Link to comment Share on other sites More sharing options...
LowIQinvestor Posted December 4, 2013 Author Share Posted December 4, 2013 touché! I had a feeling that was coming. This is worth a quick read: http://online.wsj.com/news/articles/SB10001424052702304868404579190051195934082 "BUENOS AIRES—As head of a hedge fund that specializes in distressed debt, David Martinez has had lots of practice trying to figure out when an asset's value has been beaten down so much that it is a buy. He has just made an unusual call: Invest in Argentina." Link to comment Share on other sites More sharing options...
LowIQinvestor Posted December 13, 2013 Author Share Posted December 13, 2013 This is positive...shows that the govt is open to working with TEO. Will get a nice little 4% dividend on Jan 6th! Telecom Argentina S.A. announces dividends for the fiscal year ended December 31, 2012 http://finance.yahoo.com/news/telecom-argentina-announces-dividends-fiscal-182300704.html Link to comment Share on other sites More sharing options...
LowIQinvestor Posted January 24, 2014 Author Share Posted January 24, 2014 Lots of fear in Argentina right now. WOW. Link to comment Share on other sites More sharing options...
BargainValueHunter Posted January 25, 2014 Share Posted January 25, 2014 Has ANY long term investment in Argentina ever worked out? Link to comment Share on other sites More sharing options...
Packer16 Posted January 25, 2014 Share Posted January 25, 2014 As I recall, the LUK guys purchased some Argentine assets and sold them a few years later fro a profit. Packer Link to comment Share on other sites More sharing options...
LowIQinvestor Posted January 30, 2014 Author Share Posted January 30, 2014 "S&P CAPITAL IQ LOWERS OPINION ON ADSS OF TELECOM ARGENTINA TO SELL FROM HOLD (S&P Capital IQ) We reduce our 12-month target price by $5 to $15, based on revised P/E and peer EV/EBITDA analysis. We maintain our 2013 earnings per ADS forecast of $2.91, but reduce '14's by $0.19 to $2.54 and '15's by $0.14 to $2.73. Argentina's currency depreciated sharply yesterday, and we are concerned regarding further depreciation in the currency and the Argentina's current economic stability. While we expect solid wireless revenue growth from higher postpaid penetration, we look for inflation to remain at high levels and operating costs to increase." So I was supposed to hold at $20 a share and now sell at $15? No thanks... Link to comment Share on other sites More sharing options...
LowIQinvestor Posted March 26, 2014 Author Share Posted March 26, 2014 Still think TEO is an attractive investment if you have a multi year time frame and can stomach volatility. Link to comment Share on other sites More sharing options...
jjsto Posted March 26, 2014 Share Posted March 26, 2014 In my opinion, the political "macro" environment in Argentina overwhelms any individual company fundamentals. Most public companies trade significantly below what a similar company would trade for in Chile or Brazil for a reason. A "multi year time frame" might not be long enough...I believe you have to be willing to hold companies through entire political cycles, which could take significantly more than several years. There have been modest improvements on the political front recently, but it is far from clear how the government will handle continued reserve depletion without further devaluation or significantly reduced fiscal spending... Link to comment Share on other sites More sharing options...
LowIQinvestor Posted March 27, 2014 Author Share Posted March 27, 2014 I understand your macro point but draw a different investment conclusion. 2015 could bring a more "free market" administration in Argentina. Also, I like the fact that TEO has a large contrarian value fund who has significant skin in the game now and experience in Argentina. I believe he will be an advocate for change and shareholder friendly actions. We will see how it goes... Link to comment Share on other sites More sharing options...
jjsto Posted March 28, 2014 Share Posted March 28, 2014 I get that too. Don't forget a year or two before the last elections, people were also saying a more "free market" administration could win...All I am saying is be sure to have a clearly thought out plan B...simply identifying securities trading significantly below "intrinsic" value in Argentina and holding them long term can be a risky proposition... I havent looked at TEO in a long time. I thought NTL held the controlling shares... Link to comment Share on other sites More sharing options...
LowIQinvestor Posted March 31, 2014 Author Share Posted March 31, 2014 You are right, NTL does own the controlling shares but Fintech (investment fund) bought about a 20% stake for $1B. http://www.bnamericas.com/news/telecommunications/telecom-italia-accepts-fintechs-offer-for-its-stake-in-telecom-argentina Link to comment Share on other sites More sharing options...
LowIQinvestor Posted April 3, 2014 Author Share Posted April 3, 2014 jjsto, Perhaps we are seeing signs of a shift in the political "macro" environment in Argentina already!? See article below. "Argentina's economy: Creeping toward normality" http://www.economist.com/blogs/americasview/2014/04/argentinas-economy Link to comment Share on other sites More sharing options...
LowIQinvestor Posted April 10, 2014 Author Share Posted April 10, 2014 Interesting article: http://seekingalpha.com/article/2133093-telecom-argentina-an-extremely-undervalued-situation Link to comment Share on other sites More sharing options...
LowIQinvestor Posted April 11, 2014 Author Share Posted April 11, 2014 Opportunity still exists to purchase these shares cheaply! Link to comment Share on other sites More sharing options...
LowIQinvestor Posted April 23, 2014 Author Share Posted April 23, 2014 2013 Annual Report is out: http://www.telecom.com.ar/investors/upload/20-F2013.pdf Page 14-15 have 5 years of financials. Still undervalued. Link to comment Share on other sites More sharing options...
LC Posted April 24, 2014 Share Posted April 24, 2014 I'm not sure how cheap this looks to me. In USD, they have about 600m of cash on the b/s, they earned around 400m in 2013 and trade at about 4bln. About 10x earnings. Verizon trades at 11-12x earnings and doesn't have any of the risks of operating in Argentina. Is it the fact that they are overcapitalized and can optimize their capital structure? Link to comment Share on other sites More sharing options...
LowIQinvestor Posted May 15, 2014 Author Share Posted May 15, 2014 Just saw a headline that Howard Marks bought some TEO. Earnings Out and Dividend Announced: http://finance.yahoo.com/news/telecom-argentina-announces-consolidated-first-130100275.html "Other Relevant Matters The Board of Directors of Personal, in its meeting held on April 23th, 2014 resolved to distribute P$1,100 million (equivalent to P$3.54 per share) as cash dividends, partially applying the Reserve for Future Cash Dividends created by the General Ordinary and Extraordinary Unanimous Shareholders Meeting held the same day. Moreover, it resolved that this cash dividend distribution should be paid in two installments: the first one of P$600 million to be made available to its shareholders (Telecom Argentina and Nortel Inversora) as from May 8th 2014 and the second one of P$500 million to be made available as from June 10th, 2014." Link to comment Share on other sites More sharing options...
LowIQinvestor Posted May 29, 2014 Author Share Posted May 29, 2014 Slowly but surely Argentina will become "investable". Argentina clinches landmark debt repayment deal with Paris Club: http://www.reuters.com/article/2014/05/29/us-argentina-debt-parisclub-idUSKBN0E90JI20140529 Link to comment Share on other sites More sharing options...
LowIQinvestor Posted June 17, 2014 Author Share Posted June 17, 2014 TEO on sale again. cue crickets chirping... Link to comment Share on other sites More sharing options...
petey2720 Posted June 17, 2014 Share Posted June 17, 2014 LowIq - Can you clarify the dividend situation on this. Thanks, Pete Link to comment Share on other sites More sharing options...
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