VIVO Participacoes S.A. (VIV), the Brazilian telecom provider, saw profits grow 60.9% in the fourth quarter. VIV trades with a PEG of only 0.10.

Company Description

VIVO is one of Brazil’s largest mobile telecommunications providers. As of December 2008, VIVO’s customer base totaled 44.945 million customers and controlled 29.80% of Brazil’s domestic market share.

Profit Rises 60.9% in the Fourth Quarter 2008

On Feb 13, VIVO announced fourth quarter results and saw profit grow 60.9% to R$215.5 million compared to the year ago period.

The company started new operations in the northeastern region and now has the largest WCDMA coverage in Brazil.

Zacks Equity Analyst Claudio Freitas rates VIVO a “buy” saying in a Feb 17 report, “Fourth quarter results were strong, and we expect more of the same in the short term.”

“Despite the weak economic conditions throughout the world, the company’s growth trends remain positive in the short term due to a more relaxed monetary policy in Brazil.”

“Moreover, we believe that restructuring will help the company gain synergies and reduce total debt, as recently acquired Telemig has a huge cash position,” he added.

2009 Consensus Estimates Jump

Covering analysts are bullish on the company’s 2009 prospects. 2009 consensus estimates climbed 11.5% to 97 cents from 87 cents in the last 90 days.

2010 is also looking up as estimates have jumped 49% to $1.61 from $1.08 in the last 3 months.

VIVO is scheduled to report first quarter results on May 14.

Value Fundamentals

VIVO is a Zacks #1 Rank (strong buy) stock. It has a forward P/E of 9.02. The company’s price-to-book is 1.13. VIVO also pays a dividend, with a current yield of 2.1%.

Zacks Investment Research
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