Why NII Holdings Shares Jumped
Apr 29th 2013 3:46PM
Updated Apr 29th 2013 4:35PM
Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of NII Holdings jumped today by as much as 11% after an analyst expressed optimism over an upcoming sale of wireless towers.
So what: Last week, CEO Steven Shindler said the company was preparing to sell approximately 4,500 wireless towers in Brazil and Mexico in order to focus on beefing up its network to 3G. Combined with the sale of the Peru segment that was announced earlier this month, NII will have money to invest it improving its network in its most important markets of Brazil and Mexico. Wells Fargo analyst Jennifer Fritzsche has upgraded the stock to "market outperform" following these developments.
Now what: The analyst believes that NII has several positive catalysts in the near term, including the tower sale that's still in process but may fetch higher prices than most investors are expecting. NII building up 3G service in Brazil and Mexico could accelerate its turnaround, and NII may also sell other businesses that aren't necessary. The proceeds from these transactions will also beef up the company's balance sheet.
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