The emerging economies in Latin America are increasingly using wireless communications, driving high growth multiples for companies levered to data usage in the region, says William Blair Analyst Jim Breen.
“I don’t have outperform ratings for any of the U.S. stocks, mainly because I think growth in Latin America is so much more attractive,” Breen said. “There is competition, but the data penetration is very low, so I think there is potential for more upward movement from data.”
Breen has a “buy” rating on NII Holdings (NIHD), a wireless stock invested in the largest Latin American markets. He says the company is currently upgrading its wireless data network and it targets the post-paid consumers niche.
“I believe the customer base is better positioned to take advantage of this move towards mobile data over time. [NII Holdings is] smaller than the other players, and growing EBITDA in the teens with a valuation lower than some of its peers,” Breen said. “They have got a good track record on that type of buildout.”
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