As I believe there is money to be found in all sectors, regardless of the events taking place in the economy, I focus today's article on the technology sector, closing in on the wireless communications industry. With technology expected to perform quite nicely in 2007, despite the recent correction of worldwide stocks, I see companies, especially those that have interests abroad, to contain the necessary potential to help out investors. As the wireless industry is loaded with large capitalization stocks such as Vodafone and China Mobil Limited, I have actually researched and found an excellent large-cap stock of 78 billion dollars in America Movil S.A.B de C.V (AMX) to contain both the fundamental and technical qualities of becoming an excellent asset for your portfolio.

Before heading into the subject of America Movil's figures and charts, I always believe the most important component to look for in a company is exactly what kind of business it produces. Researching on Reuter's I have discovered that America Movil "is a provider of wireless communications services in Latin America." While the language may seem a bit rudimentary, the key phrase I found in this assessment is the availability of communication services in Latin America. Providing access in over 14 countries south of the United States border, there is going to be significant opportunities in countries like Mexico, Colombia, and Brazil. As these nations continue to develop, there is tremendous growth potential in terms of new institutional and retail users of communication devices such as a cell phone. In addition, with the added businesses of Smartcom and Verizon and AMX holdings in these various companies, America Movil will only take a greater concentration ratio of this market—allowing for high costs to its users, transcending into higher revenue and profit figures. Now while this scenario sounds brilliant, an argument may be made that without a growing economy in these Latin American nations, there will be no profit for America Movil. While such a consideration is absolutely true, looking at the five year charts of both Mexico and Brazil, two of the most populated nations American Movil serves, despite a few hiccups, growth has been amazing for these major indices, with little in the way to abate this optimism. Furthermore, more specifically to Mexico, with a new government spending more on infrastructure and resources, trying to improve human capital, in the next ten to twenty years or so, there will be an absolutely different perspective on how Mexico is perceived in an economic manner. Thus, because of a large populations and growing economies, there is tremendous potential for America Movil to perform quite nicely as a long term investment.

Now, while this plan may seem ideal in theory, in order for a company to even have a chance to perform at respectable rates in the future, a business must already have strong fundamentals it can evolve from. Nevertheless, to hold optimism in the ears of shareholders of this company, there is a definite base of strong figures, which I believe can only rise, in dramatic fashion, over the next few years. Relative to the top line, over the last year, America Movil has had revenue of nearly 21 billion dollars according to Capital IQ. That number has transcended over to its shares, as its revenue per share value of 11.7 beats out competitors such as Vivo Participacoes who is now at about 3.6. In addition, revenue growth over a quarterly basis has also remained solid with an over 20% performance compared to other wireless rivals such as Rural Cellular (0.36%) and Telemig Celular Participacoes (4.30%). Such growth for America Movil has helped many analysts on Wall Street reconfigure their growth estimate for this company, as over the next five years, researchers determined that growth will be so high for this company that it's PEG of 0.44 will easily beat out competitors like NII Holdings (0.72), and Telemig Celular (6.63). However, while these figures may be nice to look at for potential shareholders of this company, some pessimism may be placed with the pact that earnings have had negative growth on a quarterly level over the past year. While this is an excellent observation, it is also important that much cost went into the investments of the recent acquirements of the various companies I listed earlier, and over time, as economies of scale are created, the negative 26.30% quarterly earnings decline will reverse. In the meantime, free cash flow, although not available from Capital IQ, remains high from my calculations, and an investor should look at more of the other positives American Movil has to offer. One of the areas which really look impressive for this company is the current projected P/E ratio. Even though, over the past twelve months, earnings have not been tremendously strong for this company, the earnings multiple for the next twelve months is signaling a decline from about 20 to 11. With a industry multiple average of around 25 and having competitors such as Telemig Celular (12.85), Nll Holdings (18.24), and Vivo Participacoes (N/A because of a negative EPS) not completely up to par with American Movil in this regard, one of the most important components for fundamental analysis proves to add on to the optimism I have reserved for this company. In addition, while other multiple ratios such as P/S (3.72), EV/R (4.01), and EV/Cash (11.9) may be a bit high for this company, this is a result of a much higher market capitalization which has been inflated by debt, triggering a much higher than liked enterprise value to its respective competitors. There may also be some concern over a low current ratio (0.9) and the problem of insolvency. However, once again, these extra debt and liabilities can be traced back to the multiple acquisitions this company has had over the past two years, and over time, once the debt is paid off, with higher earnings, revenue, and cash, these numbers should correctly align themselves with the numbers of America Movil's competitors. The question that may be asked, however, is if the management team of this company will be able to produce the necessarily means to continue to evolve its strong financial base. From the research provided, there should be no disgruntled emotions placed to CEO Daniel Hajj Aboumrad and his staff which, over the past year, has managed to produce an ROE of over 44%, a return on assets of 13%, and an ROI of nearly 26%. Compare these numbers respectively to the industry average of 10%, 3%, and 4% or with America Movil's competitor Vivo Participacoes's respective numbers of -14%, -9%, and -13%, and there is definite evidence that this company is taking advantage of the equity it spits out. Thus, after going through what the management can do, and how America Movil stacks among its competitors, there is really no reason not to at least think of this company.

Now while the fundamentals may look appealing, there may be some misplaced pessimism concerning the current US economy and how America Movil will fit that structure. With the recent freefall of stocks over the past week, because America Movil has a strongly correlated beta of 2.5, there may be some hesitation investing in this company if the S&P 500 is looking like it will decline more and more this year. However, while such may be this case, historically the S&P and other broader indexes have faired well during the year prior to an election, and with a still solid economy, there should not be too much emphasis placed on the recent trend of events—especially since America Movil is not involved with China. In addition, America Movil is still trading below is 50 day SMA, has a fairly high short ratio of 2.5, and has a strong dividend payoff, which cannot be said of all technology companies. Thus, if worries still plague your thoughts that the US economy is entering a depression, remember that this company is more specific to the foreign markets as a long term purchase instead of the presumed short term buy.