Pat McKeough responds to many personal questions on stocks and other investment topics from the members of his Inner Circle. Every week, his comments and recommendations on a selection of the most intriguing questions of the past week go out to all Inner Circle members. And every Friday, we offer you one of the highlights from these Q&A sessions.
This week, an investor asked about one of the telecommunications giants of the world stock market, Telefonica. That prompted Pat to examine the balancing act a company like Telefonica undergoes when it experiences weakness in some markets and strength in others.
Q: Hello: I am thinking of adding to my position on Telefonica, which I have in my portfolio. Thanks.
A: Telefonica SA (ADR, symbol TEF on New York; 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 40.7 million traditional telephone (or land line) customers, 227.3 million wireless subscribers, 18.9 million Internet users and 3.1 million pay TV subscribers.
As a member of my Inner Circle, you will get individual answers to your personal investment questions. And you will see my answers to questions other investors like you are asking. In fact, you will get virtually all the investment advice I have to give. You will have access to all of our advisories – The Successful Investor, Wall Street Stock Forecaster, Stock Pickers Digest and Canadian Wealth Advisor – and full access to the members-only, password-protected Inner Circle section of The Successful Investor Network website.
Although my team carefully researches all the stocks that members ask about, I personally review each and every recommendation. To ensure this close personal attention, only a limited number of members can be admitted to our Inner Circle. Under the pressure of world events, even more investors are asking for my personal investment advice. We are nearing our membership limit already. Click here to secure your membership in the Inner Circle right away.
World stock market: Telefonica builds a position in China
Telefonica now gets 43% of its sales from Latin America, followed by Spain (31%) and the rest of Europe (26%).
The company has also expanded its alliance with China Unicom, the second-largest wireless carrier in China. In October 2009, the companies bought $1 billion of each other’s stock. In January 2011, they bought a further $500 million of each other’s stock.
These share purchases increased Telefonica’s ownership stake in China Unicom to 9.7%; China Unicom now holds 1.4% of Telefonica. The partnership will continue to jointly purchase wireless equipment and build infrastructure to serve China’s fast-growing communication market.
You can see Pat’s recommendation on Telefonica in this week’s Inner Circle Q&A. In his analysis, he also looks at whether Telefonica’s growing operations in Latin America can offset weakness in Spain and Europe—and the possible effects of the weaker euro on the company’s operations. And he looks closely at the potential risks of its Chinese venture.
Inner Circle members see Pat’s analysis and recommendations on the stocks other members have asked about in each week’s Inner Circle Q&A. You can view it immediately when you become a member of this special investment group. You will get Pat McKeough’s answers to your personal investment questions, full access to our members-only Inner Circle website, and many other membership privileges. Click here to get started right away.
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