Analyst Note| Michael Hodel, CFA |
Millicom continued to build momentum during the first quarter, posting customer growth and improving financial performance across each of the countries it serves in Latin America. The firm also recently agreed to sell the remainder of its operations in Africa, though management declined to disclose how much the transactions will yield. With its focus now solely in Latin America, Millicom’s priority is to invest in its existing markets and continue reducing leverage taken on to fund acquisitions in recent years. Regarding potential mergers and acquisitions, management indicated it is most interested in buying out minority shareholders of existing operations in Colombia, Panama, Guatemala and Honduras. We don’t expect to significantly change our $64 fair value estimate and we continue to believe the shares are undervalued.