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Nortel Inversora SA Stock Upgraded (NTL)

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

NEW YORK (TheStreet) -- Nortel Inversora (NYSE:NTL) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its increase in net income, largely solid financial position with reasonable debt levels by most measures, attractive valuation levels, expanding profit margins and growth in earnings per share. We feel these strengths outweigh the fact that the company shows weak operating cash flow.

  • EXCLUSIVE OFFER: Jim Cramer's Protégé, Dave Peltier, only buys Stocks Under $10 that he thinks could potentially double. See what he's trading today with a 14-day FREE pass.

Highlights from the ratings report include:

  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Diversified Telecommunication Services industry. The net income increased by 38.5% when compared to the same quarter one year prior, rising from $56.70 million to $78.55 million.
  • NTL's debt-to-equity ratio is very low at 0.03 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.04, which illustrates the ability to avoid short-term cash problems.
  • 44.00% is the gross profit margin for NORTEL INVERSORA SA which we consider to be strong. It has increased significantly from the same period last year.
  • NORTEL INVERSORA SA has improved earnings per share by 31.0% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, NORTEL INVERSORA SA reported lower earnings of $1.38 versus $1.42 in the prior year. This year, the market expects an improvement in earnings ($2.39 versus $1.38).
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Nortel Inversora S.A., through its subsidiary, Telecom Argentina S.A., provides fixed and mobile telecommunication services primarily in Argentina and Paraguay. It operates through three segments: Fixed Services, Personal Mobile Services, and Nucleo Mobile Services. The company has a P/E ratio of 4.8, below the S&P 500 P/E ratio of 17.7. Nortel Inversora has a market cap of $2.18 billion and is part of the technology sector and telecommunications industry. Shares are up 18% year to date as of the close of trading on Monday.

You can view the full Nortel Inversora Ratings Report or get investment ideas from our investment research center.

-- Written by a member of TheStreet Ratings Staff

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

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