5-Star Stocks Poised to Pop: TIM Participacoes

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, Brazilian mobile telecom company TIM Participacoes (NYSE: TSU  ) has earned a coveted five-star ranking.

With that in mind, let's take a closer look at TIM's business and see what CAPS investors are saying about the stock right now.

TIM facts

Headquarters (founded) Rio de Janeiro (1998)
Market Cap $10.7 billion
Industry Wireless telecommunication services
Trailing-12-Month Revenue $9.4 billion
Management CEO Luca Luciani (since 2008)
CFO Claudio Zezza (since 2008)
Return on Equity (average, past 3 years) 13.7%
Cash/Debt $1.2 billion / $2.0 billion
Dividend Yield 2.4%

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 92% of the 159 members who have rated TIM believe the stock will outperform the S&P 500 going forward. These bulls include ajbakerjr and All-Star kkconway, who is ranked in the top 2% of our community.

A few months ago, ajbakerjr nicely summed up the TIM bull case:

As Brazil continues its own version of the mobile telephony renaissance that we have already experienced in the US, companies in this space that know and serve the local market will flourish. Fundamentally, [TIM] is one of the standouts in this space and its nicely priced to boot.

In fact, TIM currently sports a particularly paltry price-to-cash flow of 3.6. That represents a discount to other foreign telecom plays such as America Movil (NYSE: AMX  ) (6.5), China Mobile (NYSE: CHL  ) (5.5), and Vodafone (Nasdaq: VOD  ) (8.1).

CAPS All-Star kkconway elaborates on the opportunity:

Seen on non-Fool technically oriented, newsletters, but the fundamentals, growth trajectory and political stability of late in Brazil (always a wild card) seem to align this one with the stars -- long enough some decent green CAPs points. I was buying options in real life until I noticed how thin it's traded for a 6 billion dollar telecom. The big boys are not hedging their buys with puts; yet another fantastic sign, I hope.

What do you think about TIM, or any other stock for that matter? If you want to retire rich, you need to put together the best portfolio you can. Owning exceptional stocks is a surefire way to secure your financial future, and on Motley Fool CAPS, thousands of investors are working every day to find them. CAPS is 100% free, so get started!

Interested in another easy way to track TIM? Add it to your watchlist.

Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Motley Fool newsletter services have recommended buying shares of China Mobile and Vodafone. The Fool owns shares of China Mobile. Try any of our Foolish newsletter services free for 30 days.

We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy always gets a perfect score.


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