Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link. NEW YORK ( TheStreet) -- America Movil S.A.B. de C.V (NYSE: AMX) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its notable return on equity and expanding profit margins. We feel these strengths outweigh the fact that the company has had sub par growth in net income.
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- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Wireless Telecommunication Services industry and the overall market, AMERICA MOVIL SA DE CV's return on equity significantly exceeds that of both the industry average and the S&P 500.
- The gross profit margin for AMERICA MOVIL SA DE CV is rather high; currently it is at 54.98%. Regardless of AMX's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, AMX's net profit margin of 8.38% is significantly lower than the industry average.
- AMX, with its decline in revenue, underperformed when compared the industry average of 7.0%. Since the same quarter one year prior, revenues fell by 11.2%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- AMERICA MOVIL SA DE CV's earnings per share declined by 48.5% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, AMERICA MOVIL SA DE CV increased its bottom line by earning $1.85 versus $1.51 in the prior year. For the next year, the market is expecting a contraction of 8.1% in earnings ($1.70 versus $1.85).
- The share price of AMERICA MOVIL SA DE CV has not done very well: it is down 5.68% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. Looking ahead, although the push and pull of the overall market trend could certainly make a critical difference, we do not see any strong reason stemming from the company's fundamentals that would cause a continuation of last year's decline. In fact, the stock is now selling for less than others in its industry in relation to its current earnings.