This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Vodafone Bets Big in Spain, Picks Off Ono

Given the company's recent struggles, this is the kind of deal investors wanted. It also helps that management believes that it can generate revenues of around 1 billion euro ($1.4 billion) once synergies related to distribution, marketing and cross-selling are achieved.

This is Vodafone's second acquisition in six months. Back in September, the company acquired a controlling stake in German cable operator Kabel Deutschland.

The Ono deal, which is expected to be accretive to adjusted earnings per share, also complements Vodafone's agreement with French telecom operator Orange to build out fibre networks in Spain.

All told, Vodafone's management hit a home run. It remains to be seen how well the company can execute to extract value from its investment. But by every measure, this was a well thought-out deal.

The stock is still down about 5% so far this year, so these shares look cheap, given the value-creating opportunity that management expects Ono to bring.

At a minimum, sometime in the second half of the year, Vodafone should regain its 52-week high, which suggests possible upside of about 12%.

At the time of publication, the author held no position in any of the stocks mentioned.

This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.

2 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
VOD $35.20 0.00%
AAPL $130.28 0.00%
FB $81.53 0.00%
GOOG $565.06 0.00%
TSLA $218.42 0.00%


DOW 18,080.14 +21.45 0.12%
S&P 500 2,117.69 +4.76 0.23%
NASDAQ 5,092.0850 +36.0220 0.71%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs