Zacks senior telecom analyst David Weissman, CFA has just taken on coverage of Millicom International (MICC). Here's why he considers the shares of the telecom service provider a Hold at this time:
'We initiate our coverage for Millicom International Cellular, a leading mobile telecom service provider in various emerging markets, with a Hold recommendation. The company's strategy to incur substantial capital expenditures in order to upgrade networks has paid off with significant growth of new subscribers.
'Millicom reported solid financial results for the third quarter of 2007. In the fast growing markets of Latin America, Millicom is in the process of phasing out older TDMA and CDMA networks in order to install high-speed 3G networks.
'Management indicated that the company will increase its capital expenditure during the fourth quarter of 2007 through fiscal 2008. This highlights the company's expectation of sustainable growth prospects over the long-run.
'However, we remain concerned regarding increased competition in these markets. In addition, the problems in the credit markets may create additional challenges for the company to borrow further.'
Read the full analyst report on MICC.
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