Anytime you have a global recession like we have, there will always be a couple of movers and shakers that are outside of the typical "hot zones" for investors (Technology, commodities, etc). BRP provides telecom services, including fixed land line, mobile, and ISP functionality in Region II in Brazil.
A telecom services provider is not everyone's idea of a growth stock, but lets look a little deeper at the numbers.
EPS in the past 5 years have grown 20% annually, with an expected annual growth rate of 30% in the next five years. LT Debt/Equity is not exactly where I like to see it, but it is below 1. Here is the big one (depending on how you value stocks): Trading at a price of 52-53 today, BRP has cash on hand PER SHARE of $23.61. That is like buying the stock for $30! To top it off, how about a dividend that is yielding over 5% right now?
BRP will pay you to wait. Fair value for this stock is around $250 (yikes!). However, I'd expect it to head up to around $100 per share since it's P/E now is only around 7.5-8. If it were to head to that price, P/E would be approximately 14-15 based on earnings estimates.
I'd pick this up now, or on a slight pullback to around 50-51.
Happy investing
Wednesday, September 30, 2009
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