Top or Flop: America Movil's Midyear Update

Here it is halfway through 2007 -- the basketball and hockey seasons are behind us, and the sleepy summer heat is settling in. The lull before second-quarter earnings gives us a good opportunity to review company performance, so we'll step up to the plate and take a look at Mexican wireless-services provider America Movil (NYSE: AMX). Let's see how the company has performed so far and what may be on the horizon for the balance of 2007.

First-half review
America Movil's stock has continued a great run and has surged another 40% this year. Investors have seen lots of pesos flowing to the bottom line in the past two quarters, thanks to continuing growth in new wireless subscribers. In its most recent quarter, the company reported 30% subscriber growth over last year, thanks to rapidly expanding markets in Latin America. Strict operational management has also kept margins expanding, a very impressive feat when your customers are largely on prepaid wireless plans.

America Movil has also been busy expanding into new markets. Though it was unable to consummate a deal with partners AT&T (NYSE: T) and Telmex (NYSE: TMX) for a piece of Telecom Italia (NYSE: TI), it has completed the acquisition of Verizon's (NYSE: VZ) operations in Puerto Rico. While a group including Spanish competitor Telefonica (NYSE: TEF) ultimately worked out a deal for Telecom Italia, America Movil is still looking for ways to expand in Brazil and other South American markets.

Second-half prospects
To get a peek at what top investors think of America Movil's prospects into the future, we can tap the Motley Fool CAPS database of investor opinions and ratings on the stock. According to CAPS players, the future for America Movil is bright: They currently give the company the top five-star rating.

I've cast my vote alongside investors who are impressed that America Movil's stock still trades at a reasonable price relative to its expected long-term growth rate. The company has shown a strong track record in expanding wireless operations in South America, a region with ample room left for growth. I expect that along with strong organic growth, America Movil will continue to acquire properties that will help position it to top the market going forward.

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Fool contributor Dave Mock loves hot salsa, but he still shies away from the habanero. He owns no shares of the companies mentioned here. He is the author of The Qualcomm Equation. Surprisingly, the Fool's disclosure policy can hat-dance with the best of them.