...and Navellier Calls on Mexico

03/12/2004 12:00 am EST

Focus:

Louis Navellier

Editor, Blue Chip Growth and Emerging Growth

Louis Navellier is a leading expert in Modern Portfolio Theory, with a focus on momentum and earnings growth. He says, "An investor’s best defense is a strong offense of superior stocks with consistent earnings growth." His latest buy is a Latin American telecom leader.

"Wall Street is full of folks that like to stress out and worry. Despite record corporate profits, pessimists are worried about slowing earnings momentum. The current market environment is characterized by stable, low interest rates, record corporate profits, steady economic growth, resurging job growth, and record personal income. The flow of funds has shifted from speculative smaller-cap stocks to more liquid large-cap stocks. Foreign stocks and multinational stocks are also benefiting from the weak dollar. This is a perfect environment for the stocks on the Buy List, so I strongly recommend that investors remain fully invested.

"The latest addition to my buy list is America Movil (AMX NYSE). I’m very excited for this company, which is Latin America’s top mobile phone company with more than 43 million subscribers in six countries. America Movil’s wireless operations were spun off from Telefonos de Mexico. The company’s Telcel unit is Mexico’s #1 cellular company, which accounts for 15 million subscribers and nearly 80% of its sales. America Movil also owns 93% of Telecom Americas after acquiring the stakes of former consortium partners Bell Canada International and SBC Communications. The family of Mexican billionaire Carlos Slim Helu controls about 65% of America Movil, while SBC Communications owns about 25%.

"The Mexican stock market is now at an all-time high, and America Movil is a safe way to profit from the growth of Mexican stocks. Not only is America Movil experiencing strong sales growth of about 22% per year, but its earnings have grown over 500% during the past year due to robust profit-margin expansion. The analyst community continue to revise their earnings estimates higher for America Movil, so I expect the company will continue to post steady earnings gains. Last quarter’s cash flow jumped by 53%. The company recently reported a fourth-quarter profit of 5.7 billion pesos. That was far more than the 3.25 billion pesos that analysts were expecting. I’m adding the stock to the Moderate risk group in our portfolio."

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