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TheStreet Open House

5 Foreign Stocks That Could Pop This Summer

Oi

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Last up is Oi (OIBR), the Brazilian telecom giant. Oi is the largest fixed-line operator in Brazil with more than 20 million subscribers, and it's one of the biggest mobile carriers in the country, with 41 million cellular subscribers -- a 20% share of the market.

Oi's business isn't unlike that of a telecom company here at home. Fixed lines provide consistent (albeit atrophying) cash generation, while mobile is the path to growth. A recently launched satellite TV service is another growth avenue for Oi, and subscribers have been piling onto the network's service in the last year and change.

That diversification in networks (wireline, mobile, and satellite) is interesting -- it allows Oi to bundle services without tying the firm down to a single mode of communication. As a result, Oi will hypothetically be able to jettison its fixed-line business one day without incurring big capital write-offs. That's something you don't see among telcos here at home.

Still, competition is fierce in the Brazilian telecom industry, and short sellers are largely positioned against Oi. Currently, the firm's short-interest ratio weighs in at 12, a number that means it would take two and a half weeks of buying pressure for shorts to get out. Second quarter earnings this summer could be a catalyst for a short squeeze.

To see this week's short squeezes in action, check out the of Foreign Short Squeezes portfolio on Stockpickr.

-- Written by Jonas Elmerraji in Baltimore.

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At the time of publication, author had no positions in stocks mentioned.

Jonas Elmerraji is the editor and portfolio manager of the Rhino Stock Report, a free investment advisory that returned 15% in 2008. He is a contributor to numerous financial outlets, including Forbes and Investopedia, and has been featured in Investor's Business Daily, in Consumer's Digest and on MSNBC.com.
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