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What Makes America Movil (AMX) an Attractive Buy at the Moment?

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·4 min read
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America Movil AMX has been witnessing an amazing run on the bourse of late.

Its shares have appreciated 24% in the past six months, outperforming the broader industry’s growth of 6.9%. Also, America Movil currently flaunts a Zacks Rank #1 (Strong Buy).

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

The company has been witnessing northbound earnings estimate revisions as well. The Zacks Consensus Estimate for its 2022 earnings has witnessed an upward revision of 14.15% over the past 30 days to $1.21 per share. The consensus mark moved 26.67% north for 2023.

Let's delve deeper into what makes the stock an attractive investment option at the moment:

Based in Mexico City, America Movil is the leading provider of integrated telecommunications services in Latin America. It offers customers a portfolio of improved communications solutions in 25 countries in Latin America, the United States, and Central and Eastern Europe. As of Dec 31, 2021, the company had a total of 367 million access lines, which include 287 million wireless subscribers and 80.5 million fixed-line revenue-generating units (RGUs).

The company is working on the development of alternatives to reap more benefits from its tower assets while boosting shareholders’ value and reducing debt. The company is investing in new and state-of-the-art technologies to enhance the capacity and reach of its platforms to enable it to handle significant traffic increases with no detriment to quality or speed. A broader subscriber base and focused 5G efforts are other tailwinds. Fixed-broadband remains the main driver on the fixed-line platform.

With an increase in subscriber base, America Movil has strengthened its position in core markets. The company aims to grow in other parts of the world by continuing to expand its subscriber base through the development of existing businesses and strategic acquisitions. Also, the company is focused on its cost-cutting program, particularly in Latin America.

With the acquisition of Nextel Brazil from NII Holdings, AMX has consolidated its operations as one of the leading telecommunications service providers in Brazil, strengthening its mobile network capacity, spectrum portfolio and market position in the postpaid segment. America Movil’s joint venture with Liberty Latin America Ltd to merge their respective Chilean business operations — Claro Chile and VTR — also bodes well. The proposed agreement aims to augment fixed fiber footprint and create product diversification on the back of a robust capital structure, thereby generating lucrative revenues via cross-selling opportunities and scale. The transaction is expected to close in the second half of 2022.

Backed by a strong demand for broadband services, America Movil reported stellar results in the last-reported quarter, wherein both earnings and revenues increased on a year-over-year basis. Net income in the December-end quarter was Mex$135,589 million or Mex$2.09 per share compared with Mex$37,312 million or Mex$0.56 per share in the year-ago quarter. Further, total quarterly revenues increased 7.7% year over year.

Other Key Picks

Other stocks from the broader technology space that investors can consider are Bel Fuse BELFB, American Software AMSWA and Iridium Communications IRDM. While Bel Fuse flaunts a Zacks Rank of 1, American Software and Iridium carry a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.

Bel Fuse has a projected earnings growth rate of 3.65% for 2023. The Zacks Consensus Estimate for Bel Fuse’s 2023 earnings has remained unchanged in the past 30 days.

Bel Fuse’s first-quarter 2022 earnings per share are estimated to be 22 cents, suggesting year-over-year growth of 195.65%. Shares of BELFB have dropped 9.8% in the past year.

American Software has a projected earnings growth rate of 24.24% for fiscal 2022. The Zacks Consensus Estimate for American Software’s fiscal 2022 earnings has been revised upward by 4 cents in the past 60 days.

American Software’s earnings beat the Zacks Consensus Estimate in the last four quarters, the average surprise being 92.14%. Shares of AMSWA have declined 7.1% in the past year.

Iridium has a projected earnings growth rate of 157.14% for 2022. The Zacks Consensus Estimate for Iridium’s 2022 earnings has been revised upward by 2 cents in the past 60 days.

Iridium’s earnings beat the Zacks Consensus Estimate in two of the last four quarters and met the same twice, the average surprise being 39.4%. Shares of IRDM have rallied 5.3% in the past year.


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America Movil, S.A.B. de C.V. (AMX) : Free Stock Analysis Report

Iridium Communications Inc (IRDM) : Free Stock Analysis Report

Bel Fuse Inc. (BELFB) : Free Stock Analysis Report

American Software, Inc. (AMSWA) : Free Stock Analysis Report

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