Stock in Focus: Telefonica Brasil S.A. (VIV)

Company Profile:

Telefônica Brasil S.A. provides mobile and fixed telecommunications services to residential and corporate customers in Brazil. Its fixed line services portfolio includes local, domestic long-distance, and international long-distance calls; and mobile portfolio comprises voice and broadband Internet access through 3G, 4G, and 4.5G, as well as mobile value-added services and wireless roaming services. The company was formerly known as Telecomunicações de São Paulo S.A. – TELESP and changed its name to Telefônica Brasil S.A. in October 2011. The company was incorporated in 1998 and is headquartered in São Paulo, Brazil.

Recent News:

The company reported a 61.4% rise in third-quarter net income, compared with the same period a year ago. Its quarterly net profit hit 619 million reais ($155 million). EBITDA grew by 6.8% year-on-year to 1.7 billion reais.

The company is likely to deliver stronger results in the fourth-quarter, as Brazil’s economic outlook improves and one-off effects that hit the two previous quarters will no longer be felt. The company also expects to participate in all spectrum auctions planned for next year, including the ones for 5G frequencies.

Fundamental Analysis:

Ninestocks analyzes several different financial aspects: Growth, Profitability, solvency and efficiency.

Growth – Measures the growth of both the company’s income statement and cash flow.

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Profitability – Measures the historical price movement of the stock.

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Solvency – Measures the solvency of the company based on several ratios.

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Efficiency – Measures the strength and historic growth of a company’s return on invested capital.

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Conclusion:

VIV’s strengths can be seen in its strong profitability and robust solvency compared with its peers. Its revenue and earnings have increased over recently several years. Technical indicators signal the bullish signs, as there is a bullish crossover in Stochastic oscillator, MACD is trying to cross back up and the RSI stands at 55.18 with positive bias. We rate Telefonica Brasil S.A. (VIV) a STRONG BUY.

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