We are keeping our current Buy recommendation on Brasil Telecom (BRP). Though the company posted lower-than-expected results in the third quarter of 2008, the short-term outlook remains positive. The company also has solid cash flow, decent operating margins, and a very attractive valuation.
Additionally, the growth in the wireless and the broadband segments are encouraging and should continue in future quarters. Moreover, the merger with TNE and the voluntary public tender offer creates a positive environment for the stock in the very short term.
We believe that BRP will be less affected by the international crisis since it generates a lot of cash and is less exposed to the international economic cycle.
Read the full analyst report on BRP
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