Topic: How To Invest

Pat: I have been looking at Telefonica. About two-thirds of their business is outside Spain, with a good part in Brazil, and it seems to be growing. I think it’s a hidden gem. Your view?

Article Excerpt

Telefonica SA (ADR), $17.22, symbol TEF on New York (ADRs outstanding: 4.6 billion; Market cap: $79.2 billion; www.telefonica.com), provides a range of telecommunications services, including telephone, mobile, Internet, data and entertainment. Telefonica mainly operates in Spain, Portugal and a number of Latin American countries. The company has 231.9 million wireless subscribers, 40.4 million traditional telephone (or land line) customers, 19.0 million Internet users and 3.2 million pay TV subscribers. Telefonica’s growing Latin American operations have helped offset weakness in Spain and Europe. The weaker euro is also enhancing the Latin American business’s contribution. In July 2011, the company started implementing its plan to lay off 20% of its Spanish workforce (or 6,500 workers) over three years. It will also cut other costs in Spain and use these savings to increase its investments in Latin America, particularly Brazil. Telefonica now gets 46% of its sales from Latin America, followed by Spain (28%) and the rest of Europe (26%). The company has also expanded its alliance with…

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