October 1, 2008 - NII Holdings, Inc. (NIHD-NASDAQ) through its subsidiaries, provides digital wireless communication services for businesses and individuals. Its digital mobile networks support multiple digital wireless services, including digital mobile telephone service comprising various calling features, such as speakerphone, conference calling, voice-mail, call forwarding, and additional line service; Nextel Direct Connect service, which allows subscribers anywhere on its network to talk to each other on a push-to-talk basis, private one-to-one call, or on a group call; International Direct Connect service that enables subscribers to communicate with its subscribers in Mexico, Brazil, Argentina, Peru, Chile, the United States, and Canada; mobile Internet services, text messaging services, email services, and location-based services; and international roaming capabilities.

If you're interest lies in Latin America, you'll want to spend some time with NII Holdings. That's definitely where its interests are, especially in the Latin America wireless business sector. And the focus is paying off.

Earnings popped to 88 cents a share in the most recent (second) quarter, up from 47 cents in the same quarter last year. For the present quarter, (to be announced October 23) analysts expect 68 cents (vs 46 for same quarter last year) and for December, they see 70 cents (vs 71 last year). The whole year should show $2.89 (against $2.11 last year) and next year, analysts project $3.65. Over the last 5 years, average annual growth was 24.55%. Analysts estimate growth for earnings at 32.25% annually over the next 5 years.

Mexico is NII's biggest market, representing about 50% of all revenues. Even with intense competition, net new subscribers were up 32% in the first 6 months of 2008, with revenue jumping by 28% in the same time period, and operating income up by 26%. Further south, in Brazil which is 31% of revenues and a key growth market, net account growth was up 41% while revenues moved ahead by 74% and operating income soared by 106%. Unlike Mexico where the Average Revenue Per User (ARPU) is $69 and has been steadily decreasing because of competition, Brazil is seeing ARPU increasing, now at $64. The company is also pushing further into Argentina and Chile markets.

Growth is definitely part of NII's story. Capital outlays this year were recently bumped by $100 million to $850 million, 80% of which goes to Mexico and Brazil where networks will be enlarged. Both countries will soon auction new spectrum for third generation (3G) wireless services. NII will definitely be among the bidders. The company already has a 3G network in development in Peru and anticipates offering the advanced service across its entire markets. With over $1.4 billion in cash, there's enough in the treasury to pay for these new developments and continue the company's stock repurchase program, at least through the end of this year.

The stock hit an all-time high last year, trading at $90.40. Now you can pick it up for $36.11. But keep in mind that all economies are slowing, and investors believe cell phone operators are going to feel the pinch. And there's the element of currency exchange. If the dollar strengthens, that will lower earnings as the company converts its dinero and pesos into dollars.

More numbers: Market Cap is $6 billion with 165.7 million shares outstanding. Trailing P/E is 13.3 while Forward P/E is 9.9. Price to Sales for the last 12 months is 1.61 and Price To Book from the most recent quarterly report was 2.54. Profit margin for the last 12 months was 12.31% with Operating margin at 18.83%. Return on Equity was an impressive 25.12%. Debt to Equity is .98. Current ratio is 2.84 with Cash per share at $8.72. Book Value is $14.93. Beta is a volatile 1.88. In the last 52 weeks, the stock has traded as low as $28.71 and as high as $83.41.

Consider NII Holdings if you're looking for an international investment, especially one focused in Latin America. But beware of the perception that all economies are slowing, and that every business will suffer. That's how investors are feeling at the moment as this stock keeps going lower.

- Company Web site: www.nii.com

- Ted Allrich